Blockchain still stays the buzzword in the tech world. However, it is considered that this technology had great potential. But every technology also comes with certain challenges, and blockchain is no exception. However, there are many possibilities to overcome the challenges which will happen with time. But for now, we have brought some basic challenges associated with blockchain that may help you better understand the technology.
Ineffective Technological Design
Blockchain technology has an array of perks, but ineffective technological design is considered one of the major challenges of the technology, including loopholes or coding flaws. Bitcoin, for instance, was an edge in this term. Ethereum, a decentralized platform, tried to cover up for it by enabling the developers to implement dApps according to their system. However, many of them had false coding and loopholes. These loopholes can help the users hack the system, which shrinks security.
The Criminal Connection
Another major thing making people think twice before looking into the system is the anonymous feature of blockchain technology. This is because it attracts both the experts as well as the criminals, owing to the decentralized nature of the network, which enables to hide of the identity of the user. Better blockchain implementation, therefore, is required here to stop the criminal connection.
Scalability is also considered a major challenge in implementing blockchain. Not in the scenarios of a small number of users, but take the example of Ethereum and Bitcoin having a large number of users. It is needless to say that they have a hard situation ahead. Larger the user number, the longer the transaction process and the higher the costs.
Energy consumption is a concern for various organizations. Most blockchain technology follows bitcoin infrastructure using the proof of work and consensus algorithm. At the same time, computational power is required to keep the system alive. This can be done with the help of mining.
However, mining requires the user to resolve complex equations through your computer, which uses more and more electricity. Presently, miners are using approximately 0.2% of the total electricity. More mining means more electricity than we can provide to the miners.
Privacy and blockchain seem to be a little opposite of each other. Full privacy is not a concern anyway, as the public ledger system fuels the system. However, organizations demand privacy, as their consumers trust them with sensitive information. This, therefore, requires a solution.
Blockchain may play a crucial role in both the public and private sectors in the future. However, it is still associated with an array of challenges that clearly need technological improvements, and we may see it happen with time.