![Why I Stopped Adding Bitcoin To My Portfolio.png](https://steemitimages.com/DQmcaLANT6fcbdCqS7MrhwL6bvtfFpGuAyChExJCC1XrpLx/Why%20I%20Stopped%20Adding%20Bitcoin%20To%20My%20Portfolio.png)

``` 
Disclaimer: I am not a financial adviser, only a nerd that fell in love
with cryptocurrency. Nothing I say in this post should be used for trading
or investing. This is only my perspective on the Bitcoin ecosystem. 
```

Yes, I stopped adding Bitcoin to my cryptocurrency portfolio and will not add more in its current state. To be honest, I have not bought any Bitcoin for fiat currency since about 2016. Since then I only trade in and out of altcoins to grow my initial investment against Bitcoin.

But I have stopped that as well. There are two reasons why I stopped adding Bitcoin to my portfolio. The first one I ran across was the length of time I needed to wait just to have my transaction included into a block. I always keep my earned cryptocurrency on keys I control, not on exchanges.

Then there came the fees. At first, this was not a big deal. Two cents instead of one, then four instead of two. But at the time of writing this, the fees are touching thirty USD on average and that is insane. Bitcoin is supposed to be a peer-to-peer cash system, but with fees this high it becomes less and less useful.

What put me over the edge was not the fees or how slow the system had become, but the direction Bitcoin now takes. The future road map for Bitcoin looks less like the people-empowering currency I fell in love with and more like the current economic system.

Once I sat down and chose to learn about SegWit and the Lightning Network, I realized that Bitcoin is no longer what it was designed to be. SegWit aside, the Lightning Network looks to me like a way for a large company (or bank) to control the network.

The Lightning Network will work without a large company, and will make the transactions fast with almost no fees. This sounds great and even I fell for it at first. The issue I now see is twofold. I'll do my best to explain these two issues as simply as possible. Please do your own research.

![bitcoin-lightning-network-is-the-problem.jpg](https://steemitimages.com/DQmQHLJN6Efpv6AUcM7v1TNA6G23J8qfVqEKKYHwESwxHms/bitcoin-lightning-network-is-the-problem.jpg)

## Issues With Bitcoin
### Centralization Via The Lightning Network
The first problem I have is that when we use the Lightning Network we will not be sending Bitcoin at all. Instead, we are trading IOUs on a separate channel based on the Bitcoin we own. This all happens off the Bitcoin blockchain and nothing gets pushed to the chain until the payment channel is closed by all parties involved.

In my mind, this will give big companies power over the transactions. It looks like we could end up with a few large institutions becoming the middlemen for all Lightning Network transactions. This is because each channel on the network has to hold enough funds to complete the desired transaction.

To learn more about this issue I suggest watching [this video by *Decentralized Thought*](https://youtu.be/UYHFrf5ci_g). If the video is no longer listed at the time you are reading, then a simple web search should find similar information.

### The Storage Space Argument.
The second issue I now have is the tiny block size. By holding the size of each block to one megabyte, the network is unable to add in more transactions. As Bitcoin gets more mainstream there is a need to process more transactions. This is why the fees to send Bitcoin are so high.

This should be a non-issue. Every year our technology gets better and better. This has led and will lead to cheaper and more efficient storage. In 1967, one gigabyte of storage space cost about one million United States dollars. Compare that to 2017 where each gigabyte is a mere two cents USD.

The main argument I hear about a coin like *Bitcoin Cash* is that increasing the block size is a temporary fix and in a few years we will need to increase the size again, all leading to fewer nodes and a more centralized cryptocurrency. I strongly disagree.

![bitcoin-block-size-is-not-an-issue.jpg](https://steemitimages.com/DQmd6JjZyeHEZk416iK5SEUdWniW3Mz7Ho3MjRY8kmrpaDU/bitcoin-block-size-is-not-an-issue.jpg)

Over the past fifty years we managed to take the cost of one gigabyte from one million USD to only two cents. To say that increasing the block size will lead to a more centralized version of Bitcoin is to assume our effort to make cheaper storage space has come to a dead end.

In order to process the same number of transactions per second as a company like VISA, we would need each block to be 300 megabytes in size. This would mean that each year the blockchain would need an additional sixteen terabytes of storage space. At the time of writing this we are able to buy two eight-terabyte hard drives for 300 USD.

To me, this is already a non-issue since anyone making money from mining would be covering the cost today. As hard drive space gets cheaper, the price of Bitcoin [Cash] gets higher, and the transactions increase, the argument is null and void.

When we get to the point that all the Bitcoin [Cash] is mined and the miners now only make a profit off of the transaction fees, what would be the payout? A 300-megabyte block processing 2,000 transactions per second gives that block 1.2 million transactions in the ten minute average.

If each transaction only pays one cent USD in fees, the miner who solves the block independently would earn 12,000 USD. This already covers the cost of today's storage costs. Sounds like an incentive to keep adding storage space to me.

*Decentralized Thought* has [a great video](https://youtu.be/sbD0kiTddEs) on this topic as well. It is always good to hear all sides as well, so please don't take my word for anything. It is always better to do your own research to form your own opinion than to simply take another person's word at face value.

### Thanks for reading!
If you have any questions please ask and I will do my best to get you the answer. If you have input that may make something in this post more clear please share!

###### *All images came from royalty and attribution free sources unless specified*