Bitcoin is often described as gilded two.0; a superior system of storing and transferring value. It has seen a rapid increment in marketplace capitalization since its introduction in 2009, with strong custodial, exchange, and futures infrastructure.

Yet, 1 cryptocurrency annotator known as cryptocomicon recently laid out a series of compelling reasons why one should not invest in Bitcon. The three that stood out most were express privacy, centralized mining, and the lack of scalability.

Despite each of these being valid points to consider, they tin can also be seen equally advantages for BTC.

Zero privacy for Bitcoin is a pro and a con

Up until 2022, governments and various fiscal bodies criticized the "anonymous" nature of Bitcoin, stating that it poses a chance to the global financial system. Merely, as reported past Cointelegraph, Republic of korea recently croaky down on a large-scale sex crime ring earlier this month through tracking Bitcoin addresses.

Ane could argue that the lack of privacy measures on the Bitcoin network has actually improved the image of the dominant cryptocurrency.

Previously the public and governments perceived Bitcoin every bit the currency almost preferred for utilize in criminal activities and terrorist financing, but this view appears to take inverse in recent years as sophisticated blockchain analytics companies who offering crypto transaction tracking services emerged.

Post-obit the release of the Financial Action Chore Strength (FATF)'s revised guideline on crypto avails on Feb 22, 2022, it has become even more challenging to launder coin using Bitcoin than e'er earlier.

Thus, the lack of privacy can also be viewed as increased transparency and this could eventually prevent governments from over-regulating Bitcoin-related companies.

Low scalability can push second-layer scaling

The low scalability of Bitcoin is similar to the "no privacy" argument in the sense that it can exist comprehended in two ways: it can make transactions expensive when the network reaches its peak, but information technology tin can also encourage 2d-layer scaling.

Some state that the relatively high fees on the Bitcoin network would push for the use of second-layer scaling solutions, which many believe to be inevitable if public blockchain networks are eventually used past billions of people worldwide.

Other major public blockchain networks with loftier scalability like Ethereum are exploring second-layer scaling solutions such as plasma, indicating that second-layer scaling is necessary for any large blockchain network.

Centralized mining is a trouble at present, just is expected to amend over time

According to a study from CoinShares Research, upward to 65 pct of the Bitcoin network hashpower comes from Red china, a level unseen since 2022. While the level of mining centralization in Red china is currently high, over time it is expected to go more distributed across the earth.

To date, large mining centers in Red china take been able to access inexpensive electricity in mountainous regions of the country, operating ASIC miners at low costs with natural cooling. Consequently, the level of mining centralization in Cathay reached unprecedented levels in Dec 2022.

Boosted data from CoinShares explained that:

"While we expect this ratio to autumn again as latest generation hardware further makes its way into the non-Chinese market, at the time of writing, every bit much as 65% of Bitcoin hashpower resides within People's republic of china – the highest we've seen since we began our network monitoring in late 2022."

The researchers also said:

"We have reasons to believe the king of beasts's share of the newly deployed hardware has been predominantly installed in China. In that location could exist many reasons for this, but Occam's Razor suggests that information technology is likely an effect of relational and geographic proximity to manufacturers making barriers to business concern insufficiently lower."

China'south Bitcoin mining equipment access and hashrate. Source: CoinShares

Currently People's republic of china's mining sector has ii clear advantages over the rest of the world, inexpensive electricity and direct access to new mining equipment. Somewhen, lower electricity rates and ameliorate access to newer mining equipment could push the global mining industry to aggrandize outside of China in the years to come up, reducing the level of centralization.