In a technical sense, bitcoin can be used anywhere that the Bitcoin network can be accessed (essentially, anywhere with internet access), and governments or authorities would have a difficult time restricting their citizens from doing so. That said, governments could make using bitcoin an illegal act, and some have.
Few countries, like Ecuador, have deemed bitcoin completely illegal. Some others, like China, have put varying restrictions on the use of bitcoin and other cryptocurrencies, deeming their use legal for some purposes and illegal for others. Yet other governments have issued laws or reforms that clearly indicate that bitcoin is legal. And most governments around the world have not taken an official stance on bitcoin.
Overall, in most parts of the world, it is legal to send, receive, mine and generally use bitcoin as an individual.
For more information about Bitcoin’s legality, visit our “Is Bitcoin Legal?” guide.
WHAT ARE THE OBSTACLES FACED BY BITCOIN?
While Bitcoin adoption had been growing over the years, there are still not that many places to spend coins. On top of that, it is usually not possible to pay taxes or bills in bitcoin. Therefore, instead of paying with bitcoin directly, many users still find themselves selling bitcoin for fiat currency in order to pay their expenses.
Bitcoin’s value has also proven to be quite volatile over the years. While most (though not all) fiat currencies tend to have relatively stable purchasing power over time, there have been times when bitcoin lost well over half of its purchasing power within months. On the flipside, bitcoin has also experienced years when the value surged.
Compared to most bank accounts and payment providers, Bitcoin can be relatively hard to use. Or perhaps more specifically: Bitcoin can be relatively hard to use securely. Like cash in your wallet, if you lose your bitcoin (your private keys) they are really lost; there is no help desk to call and get your money back.
In most casual conversations, you can get away with knowing that bitcoin is, basically, a digital currency. But of course, it’s much more complicated than that and utilizing it to its fullest potential comes with a steep learning curve.
CAN BITCOIN SCALE?
The ongoing debate about whether or not Bitcoin can scale sufficiently on its path to mass adoption has led many people to question if it will ever reach that point at all.
The Bitcoin protocol’s main focus is providing security in transactions. It prevents double-spending by making it incredibly difficult to reverse a transaction because of the energy spent verifying these transactions. It only releases a set number of bitcoins into the world — and it does so very slowly. It is meant to be simple in purpose but highly secure in practice. When all of these feats are achieved, it eventually obtains the characteristics of a store of value, and that is all Bitcoin needs to be.
Bitcoin is a low-level protocol that can be used in conjunction with other protocols. The scaling opportunities in Bitcoin lie in the additional protocol layers that will be built on top of it, such as Lightning Network. As many have come to realize, it is these other protocols that can help to solve many of bitcoin’s scaling issues without having to alter Bitcoin’s current software. The idea, as Bitcoin began to grow, is that layers will be built on top of it.