The blockchain is a promising technology and has got a lot of potentials but even with all of its glory why does it still lack the flavor?
Limitations of Blockchain Technology:
- Even since Satoshi Nakamoto introduced Bitcoin to the work, the hype surrounding the digital cryptocurrency industry made Blockchain appear like a pyramid scheme.
- The Blockchain technology is still in an infancy stage and the technology is yet to mature. Upon maturity, the blockchain will be able to susceptible to capacity problems, unanticipated bugs, system failures and most importantly technically unsophisticated users.
- The blockchain system is quite a bit sociopathic and that’s why the transactions on the blockchain are immutable. Immutability is indeed a double-edged sword.
- The interference and experience need a lot of work as well. The addresses which are stored in the blocks are alphanumeric. You don’t get something as close to an IP address to access a website.
- The blockchain and cryptocurrency mining consumes a lot of energy. It’s like for every dollar a computer burns electricity, it needs fifty cents more to cool down. Some people say that the computations and energy could be diverted to much nobler pursuits like curing cancer or even solving world hunger. At a certain point in time, energy consumption will be unsustainable. To manage this, you’re going to have to shift from proof of work or improve the hardware.
- It is claimed that in short run this will cut jobs and in long runs, it will put companies and franchises like Uber out of a job. (sounds cool, isn’t it?)
Challenges in store for Blockchain:
- Initial Costs
Adopting blockchain technology promises long-term benefits in terms of productivity, efficiency, timeliness, cost reduction, but it is expensive to introduce first. The software required to execute blockchain technology within an organization is usually expensive for purchasing, acquiring, and developing in-house because it must be developed for a specific company. In addition, organizations need to obtain specialized hardware for use with software.
In addition to software costs, organizations need to search for qualified personnel in parallel with technology. The field of blockchain technology is relatively new and growing at such a fast speed that there are little or no skilled experts in that field. Due to the large demand and limited supply, the organization is willing to pay large salaries to individuals eligible for these positions.
This means that, because of the high setup cost, in most small to medium sized business it is impossible to migrate to a blockchain based full system or partial block-based system.
- Integration With Legacy Systems
To move to a blockchain based system, you must find a way to completely review the previous system or integrate the existing system with the blockchain solution.
However, with the blockchain solution, it was difficult to handle all the functions required by the organization, initially, it was difficult to completely eradicate the legacy system. Therefore, to make smooth migration easier it is necessary to make substantial changes to the existing system. This process requires considerable time, money, human expertise.
In some cases, adjusting the two systems can be undone and the organization needs to acquire a new system that is compatible with the blockchain solution. Many organizations are reluctant to move to block solutions due to the detailed planning, time and money necessary to make the entire enterprise implementation successful.
- Energy Consumption
Both the Bitcoin network and the Ethereum network both validate the transaction on the blockchain using the work proof mechanism. This mechanism requires computation of complex mathematical problems to validate and process transactions and protect the network. These calculations require a large amount of energy to power the computer that solves the problem. In addition to the energy used to operate the computer, considerable energy is needed to cool the computer.
In the White Paper published in June 2017, the World Economic Forum said, “The energy consumption of a bitcoin network is consumed in Cyprus with the power used by the average American family of about 700 at the low end of the spectrum, At the high end compared to the energy This is a Godzilla size carbon footprint that exceeds 449 billion kilowatt-hours, as designed, it protects the network and keeps the nodes honest.
A large amount of energy needed to maintain the best-known blockchains is essential for many companies that are focusing on sustainable business methods. As climate change is a major concern, the use of such large amounts of energy does not appear to be legitimate.
However, it should be noted that the Ethereum network is planning a transition to proof-of-concept mechanism, requiring much less energy to function. Since most of the actual blockchain applications are based on Ethereum’s network, they will more wisely block technology with respect to energy consumption.
- Public Perception
The vast majority of the public still is not aware of the existence and potential use of this technology. Public investment for profit is necessary for blockchain technology to shift to mainstream first. Although technology revolutionizes various industries, knowledge of the advantages of distributed forms technology is limited to companies engaged in the technology field and companies employing blockchain solutions by the industry.
Currently, blockchain technology is almost synonymous with Bitcoin. While the value of bitcoins continues to rise to an unprecedented level, there still exists an association between encryption and money laundering, implicit dealing with dark market transactions and other illegal acts.
General members must understand the differences between bitcoins, other encryption currencies, and blockchains before mainstream introductions are achieved. This will eliminate the negative benefits of Bitcoin, make the technology self-reliant, and increase the motivation to use the technology.
- Privacy and Security
Blockchains, like the original design, is open to the public. For example, consider a Bitcoin blockchain designed to be accessible to all users who have made transactions on the network.
For bitcoins and other encryption currencies, this is an important function. But for governments and businesses, this causes some concern. Governments and businesses need to protect and limit access to data for a myriad of reasons. This means that block chaining technology will not work in spaces with sensitive data until this challenge is achieved.
However, the blockchain can be customized to meet the needs and specifications of the required work. Blockchains can be allowed. In other words, people can only access parts of the blockchain related to their work. Creating such a blockchain requires a considerable amount of planning and expertise, but it reduces the concerns that companies and governments have about technology and makes adoption easier.