With the promise of being a revolutionary technology, Blockchain suffers few limitations. This technology is still in its infancy stage and needs to mature before it can experience the sunshine of acceptance by the masses.
The following are some of those surmountable challenges.
A block in a blockchain is created only after the transaction has been approved by other nodes in the network. Currently, it takes roughly 10 minutes on the Bitcoin blockchain to verify and add a new block to the chain. As more transactions happen on Blockchain during peak time, waiting time is bound to grow exponentially.
As of now, approximately 60 transactions/second is the rate that Bitcoin blockchain can handle. Comparing it to Visa, which can handle nearly 47K transactions per second during its peak time, clearly Blockchain needs to catch up.
With more requests clogging the network, the only way out of to increase the transaction fees.
Blockchain is next-generation technology slated to disrupt industries. Yet, acceptability towards Blockchain is slow and vague. It’s primarily because adoption of blockchain means removal of intermediates and reduction in profit since fees to third parties would no longer require to be paid.
This has caused reluctance in industries to adopt Blockchain. Understanding blockchain technology and its initial implementation is also a hindrance to the smooth adoption of this technology.
Lack of Regulation
We seek trust while performing any transaction, including and especially, monetary transactions. And till now, we are dependent on regulatory authority to ensure that nothing wrong can do with our transactions. It’s hard to imagine this trust can be established by a piece of code (Smart Contracts).
However, with Blockchain, we are steering into the direction where the regulation is provided, not by a typical organization, but by embedded code. Lack of regulation is not a challenge per se, its more of acceptability issue.
Blockchain is a public ledger which means every transaction is recorded and is available for everyone to see and verify. This risks the privacy of an individual if sensitive information gets recorded on a blockchain. This is clearly a concerning issue.
Without a mechanism that let a user decide which information to be made public and which should not be, blockchain cannot be used for implementing public applications.