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Better Than Bitcoin? The Solution to Bitcoin's Problems.

Mason

Word count: 926

05-21-21 (mm-dd-yy)

Problems With Privacy

Bitcoin was originally created to be anonymous, decentralized, and mineable on CPUs. In the present time, bitcoin isn’t really any of these things. In terms of privacy, at its best bitcoin is pseudo anonymous. Anyone can see your transaction history and the amount of money in your bitcoin wallet. All it takes is them knowing what your wallet address is. For instance, if you were to receive a payment from someone or if you were to send money to someone, they would have access to your wallet address. From there they could see your spending habits and see the bags of bitcoin you’re holding. Combine this with the advanced block chain analysis tools that now exist, and the fact that most Bitcoin is bought on exchanges where KYC laws are enforced, this makes Bitcoin an extremely transparent currency, even more so than FIAT.

Problems With Decentralization

Bitcoin was originally designed to be mined on CPUs. If you don’t know what mining is, essentially you’re putting your hardware to work to solve cryptographic equations in order to verify transactions on the block chain. This is what makes cryptocurrency decentralized. Instead of a centralized authority (such as a bank), you instead have individuals all around the world verifying transactions. The creator of bitcoin originally intended for bitcoin to be mined on CPUs since everyone using a computer has one and therefore your one CPU = 1 vote on the blockchain. However, people started mining on GPUs which proved to be way more effective than CPU mining. Eventually, special computers called ASICS were designed solely to do one task (mining bitcoin). Now these ASICS dominate the network. Unlike CPUs, ASIC miners are hard to obtain since they’re primarily used by the companies that make them. After the profitability of mining goes down, these ASIC miners are then sold for extremely high prices. ASICs are usually not profitable for the consumer and are mainly used by large mining operations. Fast forward to now and 75% (some people speculate that it may be higher than 80%) of bitcoin mining is done in China by companies or people with large amounts of money and ASIC miners. This is why Bitcoin is no longer decentralized, since everything is centralized in China. Instead of 1 CPU = 1 vote, thousands of ASICs = 1 vote.

Problems With Transaction Time/Transaction Speeds

Bitcoin can only do about 4.6 transactions per second. Compare this to VISA which can do up to 24,000 transactions per second and you might wonder why any person new to crypto would want to adopt Bitcoin as a currency. The average fee for one of these terribly slow transactions is around $13.44 USD. Transaction fees have even reached nearly $60 USD as an all time high in 2017.

The Solution

The solution is to simply not use Bitcoin, and instead use a different cryptocurrency called Monero. This currency has quite a few advantages over Bitcoin and has been around and in active development since 2014.

Privacy With Monero

Privacy is freedom and Monero is private by default. Monero prevents anyone from seeing who you transact with, how much Monero you spend, and how much Monero you own. The last thing you want is for people to know your spending habits and how much money you’re sitting on (or lack thereof). Even if you’re not very privacy conscious, lack of privacy still has one big flaw. Since Bitcoin is tracked, any dirty Bitcoins (hacked/stolen Bitcoins, Bitcoins involved with criminal activity, Bitcoins used to buy drugs, etc), that are sent to you could cause you to be investigated since you have direct links with criminal activity. Even if you’re completely innocent, receiving these ‘tainted’ Bitcoins is still a possibility. This also means that ‘tainted’ Bitcoins are less valuable. This isn’t possible with Monero, for the reasons described above.

Monero and Decentralization

Monero can only be mined by CPUs, thereby enforcing the original idea of Bitcoin (1 CPU = 1 vote). If you’re using Monero, you have a CPU. Every computer has a CPU which means that anyone can start mining Monero, therefore promoting decentralization. This also means Monero is better for the environment. When ASIC Bitcoin miners are no longer profitable, they are thrown away creating a ton of e-waste. CPUs however, are reusable and can be sold off to different people for uses other than mining. CPUs will always be valuable. ASICs will never be able to be reused.

Transacting with Monero

Monero can process 1,700 transactions per second. This still isn’t as fast as something like VISA, but compared to Bitcoin’s 4.6 transactions per second, this is an enormous leap. Monero also has significantly cheaper transaction fees. The average transaction fee will be around $0.0053 USD. The highest being $0.63 USD. Compare this to Bitcoin’s average fee of $13.44 USD, with a highest of a whopping $60 USD. Monero also has a dynamic block size, meaning more transactions can be included in a block if future increases in transaction volume occur.

Conclusion

Bitcoin is often described as a decentralized anonymous store of value. This may have been true in the early days of Bitcoin, but today this couldn’t be farther from the truth. Bitcoin’s lack of true privacy, lack of decentralization, high transaction fees, and slow transaction times make it not a viable option for a currency. Monero is a fungible, privacy oriented, decentralized coin with quick transaction times and low transaction fees. Monero is what people think they’re buying when they buy Bitcoin.

Privacy is freedom. Freedom is Monero. :^)