Undoubtedly Blockchain is an inevitable Technology which has enormous potential. The way it is showcasing its use cases and fining applications in all the business niches, it becomes an excellent technology for the future.
Blockchain became noticeable after Bitcoin came into existence. It is the underlying technology of Bitcoin but, from 2009 to date, Blockchain has undergone a huge change, it has become a technology which has more uses as compared to what we know. The developers are trying to find use cases of Blockchain technology so that it can become a part of mainstream life.
We have heard a lot about Blockchain and its usage, how it can positively influence the world, but at the same, we cannot ignore the fact that it is at a very nascent stage and to make it perfect there is a need for many improvisations.
Despite a large number of supporters supporting this technology, we still have the drawbacks that need to be addressed. There are some areas of concern on which the developers need to work so that they can create a full-proof technology which can handle a large volume of data and at the same time it also ensures safety and security.
Many people believe that Blockchain is a bubble that will soon deflate, but for most, it is a promising technology. In this blog, I will be highlighting what the top 5 challenges that Blockchain technology is facing in its path of growth are.
Top 5 Challenges with Pubilc Blockchain:
- Privacy Limitations- Pseudonymity is one of the critical features of Blockchain Technology, and when it talks about anonymity, then it means that we know that the transactions or trading is happening from someplace, but there’s no real-world identity attached to the same. It raises the concern, what if there is a fraud, and how will we track the person, whom to catch in case of fraud or hacking.
In case of the public Blockchain, the details of smart contracts entered by the users in the Ethereum network become open to the public. Under such circumstances, uploading data like health records, personal information, medical documents and identity verification, financial reports become vulnerable to hackers attack.
- Lack of Regulations And Governance – The critical feature of Blockchain Technology is that it lacks regulation. It allows peer-to-peer transaction which means there is no intermediary. Moreover, there it also requires governance from authorised bodies. You cannot hold anyone responsible for maintaining the network standard thus making the entire system dicey and sceptical.
- Cost to set up- The cost to setup-the developers might be preaching a lot about Blockchain Technology, but we cannot ignore the fact that to set up the entire system of Blockchain Technology is expensive especially if you wish to set up the whole operation in-house. Moreover, you may also need to buy specialised hardware for use this software. Apart from the software and hardware cost find a person to work on this system efficiently is yet another area of cost in terms of time. Since the technology is entirely new and there are frequent changes in the same, the organisations need to spend a lot of money in training, setting up the infrastructure and other areas of cost, thus making it a costly affair.
- Huge consumption of energy- One of the important areas of concerns while using Blockchain Technology for cryptocurrency exchange is the energy it consumes. Whether it is Bitcoin or Ethereum network, to validate the transactions they follow Proof-Of-Work mechanism which consumes a lot of energy while solving complex mathematical problems. As per the whitepaper published in June 2017, the energy consumers in Bitcoin network can be used by 700 average American houses. With such a large consumption of energy, it becomes mandatory to come up with an alternative consensus mechanism that could consume less power.
- Public Perception- The biggest drawback in the way of the success of Blockchain is the perception it holds in the eyes of people. Firstly, people don’t see it be a part of mainstream functioning. Secondly, most of the people believe that this technology will not last long. The feature like the lack of governance, easy access to become a member of public Blockchain and lack of regulation further deteriorates the image of Blockchain in the eyes of people. All these factors contribute as challenges for the growth of this Technology.
For Blockchain to emerge as a winner and a part of the mainstream, it is important that the developers need to break the ice and come up with a system which is safer and secure.