Kevin Lawton is a tech entrepreneur who's successfully launched 10 different startups. He also knows a thing or two about Bitcoin, and during a recent interview with USA Watchdog's Greg Hunter spilled the beans about what he sees as impending doom for the digital currency – at least in the short term.
Basically what's happening is that there are two schools of thought as to how to deal with ongoing problems in Bitcoin land. Transactions are slow and ever-worsening as more and more people use the crypto coin to buy and sell without the need for fiat currency. Those who developed Bitcoin have an idea as to how to address this, but so do "miners" and everyday folks who trade with the stuff – and the two ideas differ substantially.
"In Bitcoin, there are huge scalability issues in terms of transaction speed," warns Lawton. "It's been ongoing for years now. There is a set of ideals from the developers on how to fix this, and there is a set of ideas from the miners and payment transactors on how to go about fixing this."
"They are sort of like two camps, and they have really split off. The developers have a proposal ... and that will probably roll out around August 1. Then, on the other side, big money people and payment processors and miners ... they have their own proposal, and they want to do more than the developers want to do." (Related: To keep up with the latest Bitcoin news, be sure to bookmark BitcoinCrash.news.)
It's not that Bitcoin is inherently bad, nor is the concept itself a failure. Cryptocurrency has a lot of potential to unhinge a society from the shackles of private, central bank-issued fiat currency, for instance, that can easily be manipulated and controlled by third parties. Since it functions on a peer-to-peer basis, cryptocurrency truly can be money by the people and for the people – completely decentralized from federal intrusion.
The problem is that many people are using Bitcoin for speculative purposes, which has greatly driven up costs and turned it into more of a high-risk investment than an actual currency. The other problem is the upcoming "fork" that will split the blockchain into two, potentially creating some very serious problems for Bitcoin users.
"When the split happens, you effectively have the blockchain go down in two different directions," Lawton warns. " You can think about your crypto coins existing on both paths at the same time. It can create a lot of havoc."
"If it happens in a short time frame, and there is a big winner and everyone gets behind it, the blockchain reorganizes itself and goes down the same path and you are fine. If it doesn't happen in a short amount of time, some really bad things can happen. You can get double spend issues with your coin. You can have this thing called 'reorganization,' which can disappear your transactions. I anticipate people who have big money at play are probably going to want to liquidate their Bitcoin ahead of the potential fork nightmares ... There is the possibility of liquidations."
The full interview with Lawton is available for viewing on YouTube.
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