H istory reveals that innovation in technologies spread at such a rapid pace among communities that it later paid more awareness to existing flaws of these innovations. Somewhat similar is the case with blockchain. Only research and development professionals in the field are proficient to understand its existing issues and limitations.
Some people in the blockchain world have condemned that blockchain is more publicized when in actuality, the technology has restrictions and is not appropriate for digital interactions. When you take a look at some of the downsides of the technology, it becomes easier to understand why some of the largest accounting and financial firms are still in the early stages of their feasibility studies. Let’s have a look at what these pitfalls are, and how much impact they could have on the future growth of blockchain utilization.
One of the significant problems with the blockchain concept is its inherent complexity. The blockchain concept is difficult for people to grasp and it utilizes arcane jargon and industry-specific acronyms just add to the complexity.
Blockchain technology involves a completely new vocabulary. It has made cryptography more conventional, but the blockchain industry is full of jargons. The algorithm and the network of nodes, validate entries in the blockchain. Again, this is not understood by most people and it is not possible to have a trusted service without a trusted party.
Bitcoin currently has a notable transaction cost after being recommended as “near free” for the first few years of its existence. Each transaction in the Bitcoin network costs about $0.20.
Apart from the transaction fees storing the information in the Bitcoin network is also chargeable. This is called bloating and is often questioned because it forces miners to perpetually reprocess and rerecord the information.
Blockchain technology operates as a push-based settlement system. This means every individual in the Bitcoin Network holds power over the resource they want to verify on the blockchain. This is one prominent safety flaw in Bitcoin and different blockchain networks. A lie will grow to be the reality if greater than half of the computer systems working as nodes to service the community inform a lie. This flaw was highlighted by Satoshi Nakamoto when he launched Bitcoin which is known as 51% assault. And because of this, Bitcoin mining pools are monitored carefully by the validators, guaranteeing nobody unknowingly positive factors such community effect.
The blockchain protocols are designed in a way that each node should uphold the same replica of the blockchain and it should have every transaction from the beginning of time. Any new device, in order to become a node in the Bitcoin network, should download all the transactions right from the first block which was mined back in 2009.
The same principle holds for other blockchain applications as well. Bitcoin’s blockchain size is more than 100GB. Every device should hold a copy of blockchain in order to be a part of the network and simple resources with power limitations might not provide the demanded storage capacity.
Large energy consumptions
The crypto miners network work with 450 thousand trillions solutions per second in efforts to legalize the digital transactions via extensive amounts of computer power. As the blockchain technology is growing more computing devices are required to process even the smallest digital transaction. The system should support thousands of transactions per second and the blockchain size will be overstuffed in no time. Although the younger networks or small blockchains wouldn’t experience the same problem, but there’s no denying that this is a major limitation of the blockchain technology.
Like all distributed systems if a blockchain is used as a database, the information going into the database needs to be of eminence quality. The data stored on a blockchain is not instinctively trustworthy, so events need to be recorded accurately in the first place.
The phrase garbage in and garbage out is valid in blockchain world record, just as with a centralized record.
The protocols offer an opportunity to digitize governance models. In fact, miners are also forming another kind of incentivized governance model. So it’s natural that there would be public disagreement between diverse community sectors.
These arguments are the prominent characteristic of the blockchain industry and are expressed more clearly around the query or event of ‘forking’ a blockchain, a process that incorporates revising the blockchain protocol when a plurality of a Blockchain’s users have agreed to it.
This disagreement can be very technical, and sometimes tough, but are helpful for those who are interested in the amalgamation of democracy, common agreement and fresh opportunities for government experimentation that blockchain technology comes to light.
It is clear that the blockchain model embraces great promise, and that it will have strong implications for all sorts of industries. It’s also clear that the blockchain is not a cure-all, and that its existing issues that could put severe consequences for future growth & implementation.