Many consider the Internet as the most important invention in the last two decades, but the Blockchain steals the spotlight today. What makes it so interesting is it provides us with a completely new way to carry out transactions that are too complex and that involves multiple parties. It eliminates the need for middlemen. One day, it will power our money transfers and subsidy schemes. But, let us not get too excited about the technology.
Initial Disadvantages of the Blockchain
- Throughput capacity
- Storage limits
- Challenges of integration
As the blockchain is further developed, many of these initial disadvantages are closing. The fast developing ecosystem is addressing them to drive further deployment and adoption. But, there are still some serious limiting factors that can mess up the technology’s potential to change the world:
- It is not environment-friendly. The Bitcoin might be the most carbon-polluting technology invented in the last three decades. While it has great potential in its use outside the cryptocurrency world, it also has a negative effect on the environment. It is estimated that a single bitcoin transaction uses the same amount of electricity as 1 and ½ households over 24 hours. In other uses, the blockchain could burn more fuels in other countries.
- It lacks transparency. The modern trend is greater openness and tracking in communication and commerce. But, the blockchain is a closed shop by design. Generally, it is an efficient system for data exchange, but data is only visible to somebody who chooses to mine it. This means some of the data is hidden and the rest are massively distributed, which defeat the purpose of migrating to businesses that offer transparency.
The blockchain has entered a hype cycle. But when we get past that hype, you will realize that there is something fantastic going on in the technology. It is a revolution in the making. Its potential as a technology makes it so exciting in so many ways. In fact, it is being considered to be adopted to the Internet of Things – to take it to the next level. There is no denying that the blockchain will change our lives in the future. While it has some serious limiting factors, the overwhelmingly positive ones are what we are rooting for.