October 24, 2019
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Learn The disadvantages of blockchain

By on May 12, 2019 0 614 Views

Any technological revolution has its drawbacks. Throughout the developmental process, researchers have identified some of the issues and limitations, as well as the incompatibilities in Blockchain’s digital interactions:

The disadvantages of blockchain

Complicated:

Blockchain technology carries with itself a wide range of new concepts. Blockchain has turned the virtual currency into a much “hot” topic than ever before. It has pulled in a wave of profiteers and is filled with convoluted jargon;

Network Size:

Blockchain has the ability to “resist” threats. This requires a large network of users that is strong enough for the system to fully benefit and grow. However, some comments said that this is also a fatal flaw, which forced some blockchain projects to be hampered.

Price and network speed:

Bitcoin is now paying close attention to the price of the transaction after being “almost free” in the first few years. By the end of 2016, it could only carry seven transactions per second, for $ 0.20 per transaction, which contained 80 bytes of data;

Human error:

In order for the data on the blockchain to be reliable, it is required that the information entered into the database must be accurate from the beginning. If operators feed inaccurate information to the system, then the whole blockchain will be considered worthless;

Inevitable security flaws:

If more than half of the computers (nodes) serve the network lie, then the lie will turn into reality. This was called the “51% offensive”, even Satoshi Nakamoto emphasized this when releasing bitcoin;

Politics:

Since blockchain protocols create new way to digitize administrative models, bitcoin miners must formulate more advanced types of governing models. This creates inconsistencies between communities, expressed through the “forking” event associated with updating the blockchain protocol, when the majority of blockchain users have agreed to it.

The challenge of integrating with old enterprise systems and information systems:

Due to its unique nature, Blockchain is always slower than centralized databases. When a transaction is being processed, Blockchain must do the same thing as a regular database but at the same time has to adhere to other protocols.

Verification of signature:

Each blockchain transaction must be validated using a public digital cipher scheme. Because of the “peer-to-peer” communication between nodes, their source cannot be proven. This creates computational complexity and forms the main bottleneck in blockchain products;

The consensus mechanism:

because the database scattered to reach consensus, it requires the parties to make an effort to ensure that the nodes in the network participate in the certification. This dependence is detrimental to blockchain, if there is deliberate manipulation from outside.

Redundancy:

because transaction is handled independently by every node in the whole network, resulting in the total amount of computing that a blockchain requires to be too large, compared to the recognized performance of a single node to validate for a result, blockchain consumes a lot more of energy.

Unprotected customers:

Because Blockchain technology acts as a “push” based settlement system, individuals hold power over the resources they want to verify. Therefore, if the transaction is defective after being verified on the blockchain, reversing the transaction requires the use of a centralized system such as a bank;

Resolution on a Blockchain is slow:

Because of the needed consensus to validate transactions, it is required that all nodes in the network to recognize the transaction. This process is much slower than allowing the bank to verify the transaction immediately.

Miners can be selfish. The blockchain exploit uses game theory, encouraging people to commit to using computer power to ensure network operations. But to make a lot of money, by finding and verifying a block in the quickest way, miners will probably find empty blocks and validate, or exploit, find and validate a block without publication and distribution a valid solution for the rest of the network.

Blockchain capacity grows as each new block grows, while each node confirms the need to save the entire Blockchain history in order to become a participant. According to Andrew Keys (2017), the total blockchain capacity in January 2017 is 98GB, while in 2016 is only 50GB. This will eventually remove many miners in the future;

The last solution on the blockchain is not cheap, because the space in a block is finite resource. When the number of transactions to be dealt with in a block exceeds the storage capacity, higher-fee transactions will be required. Miners then can maximize their profits, by asking for the highest transaction fees available.

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