Those keen to invest or trade Bitcoins have to sign up with any of the leading cryptocurrency exchanges. While crypto trading may be big today, there are many challenges that the industry faces primarily because it is still in a nascent stage. Whether it is establishing credibility, making a rock-solid reputation, dealing with the banking industry, regulations, etc, challenges are aplenty.
Top 6 challenges that Bitcoin exchanges have to face:
- One of the biggest challenges faced by Bitcoin exchanges comes from banks. Banking services are necessary for any business to run. However, most of the banks in the UK show reluctance to work with companies that operate in the crypto space. This means that these companies have to search for banking partners in other countries or continents.
- Earlier, Bitcoins have been used for paying for illicit substances on the Silk Road. This online black market has tarnished Bitcoin’s reputation severely. Silk Road was shut down by authorities and while it has diversified in other fields, the stigma is still there and Bitcoin’s reputation will always be under the scanner. As a measure to tackle this problem, exchanges have introduced handy educational resources like Learning Centers where the basics of Bitcoins are covered. These host talks by people from different walks of life on Bitcoins. Educating people on Bitcoins may look like a small step now, but with time, it will help in the mainstream adoption of Bitcoins. There is also information given about bitcoin automated trading bots such as Bitcoin Superstar which help beginners to trade like a pro.
- Transaction delays are another challenge faced by exchanges today. Many crypto trading platforms conduct transactions at a slow speed, affecting the quality of user experience. In the blockchain, requests are queued and this is responsible for the delay.
- Since the Bitcoin industry continues to be in a state of infancy, regulations are not uniformly deployed. Many exchanges handling Bitcoin transactions have implemented rules from the very beginning, in conformity with KYC and AML or anti-money laundering regulations. With the global crypto market growing there is an even greater need for cryptocurrency exchange regulations so as to avoid frauds and cybercrimes. But, even today, cryptocurrency regulations are different for different countries; while Malta has progressive laws, China has very stringent laws.
- For most businesses, marketing is a crucial aspect of their survival. There is a lot of effort made to boost sales through online advertising methods like Google AdWords. But, Google has imposed a ban on all cryptocurrency-related advertisements on Google AdWords. This was to keep in check fraudulent advertisers. With Google taking this harsh step, even other popular social media platforms like Twitter and Facebook had started banning crypto-related ads. Recently, however, Facebook has relaxed this policy.
- While the crypto world is moving slowly towards mainstream adoption of Bitcoins there are newer issues surfacing as challenges for the crypto exchanges. There have been changes throughout Bitcoin’s history including events like hard forks, network upgrades, ICOs, blockchain concepts, crypto heatmap, etc. So, exchanges have to keep coping with all these new technologies and innovations. This can be a time-consuming exercise especially when you are already struggling to operate a business.