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What is the biggest threat to Bitcoin?

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The Bitcoin (BTC) network is often seen as an extremely secure and stable network. The decentralized nature of the network makes it virtually impossible for malicious organizations to take down the network. However, that does not mean that the network can never come under great pressure again. Parallax Digital CEO Robert Breedlove believes some major ‘ Black Swan’ events could cause major problems for the network.

Black Swan events
Within the world of finance , a Black Swan Event is an event that is impossible to predict in advance, but which can have enormous consequences. Breedlove states in an interview with Kitco News that it cannot be ruled out that such events could take place for the Bitcoin network in the future.

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In particular, events that can undermine the hash rate , or computing power, of the network are a potentially major threat to Bitcoin.

Last year, of course, such an event took place. The Chinese government announced in mid-2021 that they would soon ban the mining of cryptocurrencies such as bitcoin. As a result of these measures, the hash rate of the Bitcoin network plummeted. We now know that the network was able to recover itself quite quickly. Meanwhile, the network’s computing power has even hit new records.

Bitcoin hash rate and regulation
According to Breedlove, however, it is not self-evident that the Bitcoin network will also be able to recover in the future. If this does not work, according to Breedlove, the bitcoin price could take a serious blow.

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“What will make me revise my Bitcoin narrative is the realization of a Black Swan that is radically cutting the hash rate down. The hash rate is how much energy and capital is put into Bitcoin’s production and security, and I would expect that to be reflected in the price. The price would take a big hit, because right now Bitcoin is by far the most secure computer network in the history of mankind.”

Breedlove also expects government regulation to throw a spanner in the works in the future. He makes the comparison with ‘Executive Order 6102’ in the 1930s in the United States. At the time, private ownership of gold was banned by the US government. Such regulations could be disastrous for Bitcoin, according to Breedlove.

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