Despite the promise of blockchain technology for global markets, it is not necessarily a universal cure for all our business challenges. Bitcoin has already become a household term and blockchain solutions are being implemented across industries, but what obstacles are preventing widespread adoption? In this article, we’ll look at some of the problems with blockchain to see how they can be addressed to facilitate greater use. If you want to invest in bitcoins you can visit this Bitcoin trading Platform.
Some Problems Related to Blockchain Technology
Although they are often touted as being extremely secure, blockchains can be vulnerable if one node is hacked. That means that all the data shared within a blockchain could be exposed as simply breaking into one device connected to it would give an intruder access. Additionally, while forging a transaction in a chain may not always be possible, someone with malicious intent can get their fraudulent transactions approved which poses another security risk for those maintaining and relying on this technology.
- Proof of Identity: Blockchains use consensus algorithms that involve voting by nodes with an identity to reach a decision. It sounds democratic, but there are issues associated with this approach; for example, minorities can be side-lined or the network can be manipulated by malicious actors if they buy enough votes. Unfortunately, it’s easier than ever before for groups of criminals to hijack blockchain networks and obtain approvals on any transactions they wish.
- Proof of Stake: Stakeholders play an important role in the security of blockchain networks. The more cryptocurrency a stakeholder owns, the higher their voting power is. If someone or a group acquires over 50% of the network’s assets, they gain control of it — this creates what’s known as a “51% attack.” Both proof-of-identity and proof-of-stake consensus mechanisms are vulnerable to these types of attacks.
The more complicated a blockchain gets, the more prone it is going to become. Blockchain technologies tend to be hard to scale because of their redundancy. Each transaction made has to be saved on every unit in your network, out of the genesis block to the newest transaction. Yes, that’s correct – thousands of copies of identical information.
It takes a lot of storage space, and also the more complicated the blockchain, the greater energy the nodes will need to deal with the processing of the information. Perhaps even though you’ve all of the electronic, software program, as well hardware demands addressed, it is going to be virtually impossible to regulate your blockchain.
Slow transaction speeds are showing themselves to become a significant barrier to the extensive use of blockchain technology for functional purposes. Since blockchain is decentralized, every transaction needs to be confirmed by the nodes before it could be approved as being a block. In central systems, trust is positioned in a primary authority (government or bank) that lets them process large numbers of transactions each day.
The incorporation of blockchain technology into business processes has brought about a lot of excitement. It looks like a terrific idea! Transparency within supply chains may provide the closure needed for everybody to make ethical choices, after all. Nevertheless, utilizing public blockchain (which is probably the most typical kind) in a business environment is usually not always the smartest idea.
Why? When a supply chain happens to be transparent, so is the information of all clients as well as suppliers that are associated with that company. Total transparency isn’t optimal if you are working in a business environment as it lets you see what every individual is doing in the natural time. You can find private blockchains that will stop specific transactions from being observed by other people, however, they do have their downsides also.