Following are some of the reasons due to which many people fail to understand Bitcoin:
Mining operations are a convoluted mystery to the average layman. The whole Bitcoin edifice hinges on the blockchain technology, with fresh blocks of 25 coin each being added at periodic intervals by ‘miners’ who hook up on the blockchain network and pool their computer resources to create fresh coin. However, the process gets progressively more difficult even as more coins are created. This means that if the processing requirements for bitcoin were such that a person could make about a buck a day, now they have become so complex that the same amount of computer time would barely generate even a single penny. And as the algorithms becoming more complicated, the process becomes harder and system requirements also become more demanding. This means that mining operations generate far less returns for their efforts than they used to, before.
This is another reason why there is so much fear when it comes to people and their affinity to paper money. From its meteoric rise to its free fall, the digital currency has been in a constant state of flux and that has created a significant impact on the minds of the potential investors, just as they were gearing up to make their initial investments.
The very nature of digital currencies
People tend to trust what they understand and consequently distrust all that they don’t. Unlike paper currencies that can be seen and felt and deposited via well-known instruments such as checks and pay orders into their bank accounts, bitcoin does not exist beyond the realm of the virtual world. That is, it cannot be physically seen and felt. This makes many people quite wary of this currency.
Murky control protocols
This is yet another reason due to which people have a tough time grappling with the concept of digital currencies in general, and bitcoin, in particular. Unlike paper currencies that are stringently monitored and controlled through the regulatory mechanisms of financial bodies and governments, there is no particular person or governing body responsible for the ebb and flow or the rise and fall of bitcoin.
This is why there is no corresponding sense of responsibility associated with it, as such. Since there is no face that people can see and relate to, when it comes to regulating bitcoin, they are afraid of converting their paper currency reserves into something as formless and faceless as bitcoin.
In the light of the above, we can safely conclude that bitcoin itself is not to blame, but rather, the lack of education of the common man that stops them from purchasing and using this crypto-currency to its full advantage.