Top Challenges in the Blockchain industry that no one talks about
How easy is it to venture into Blockchain? Technology service providers across the sphere have been weighing their options to look beyond traditional technologies. While it’s wise to take a leap but ditching areas where you have a strong foundation may put your business presence at risk. Many didn’t realize this and thus resulted into most of them not losing track. Although Blockchain has been outperforming in the tech trends of recent, it has an untold story of challenges, including increasing costs, reception roadblocks, scaling related issues and constant regulation. Here’s a quick glimpse at the possible hurdles that you didn’t know.
Rising Blockchain environment costs
Blockchain relies heavily on encryption and security in order to ensure that transactions are carried out securely. This involves consumption of significant amount of computing power. With increase in the number of transactions being carried out on a regular basis, the power consumption is also going to increase exponentially.
It has also been claimed that today, Bitcoin mining alone consumes more power than that consumed in 159 nations around the world. This would not sound too pleasant given that most nations are still heavily dependent on non-renewable sources for their energy production.
Certain industries have lapped blockchain pretty well. However, there are a number of them that do not seem to be as enthusiastic over its implementation as others. Despite the fact that Blockchain is incredibly secure, its biggest weakness is that a public ledger is used to store transactions. This is essentially a big put-off for key decision makers as certain transactions are too valuable and confidential to be stored just like that.
Although the issues are being addressed with private blockchain networks that have a highly rigorous vetting process for new members and additional security measures put in place, mainstream adoption will take time.
Blockchain getting highly regulated
To start with, Blockchain wasn’t much regulated, making it immensely insecure. Market manipulation and scams were a common sight then. They still are and making lives of investors and stakeholders difficult. It has had its fair share of Ponzi schemes such as ‘Onecoin’ robbing millions of investors of their hard earned money.
Now comes the worst part, the governments are moving in, choking the industry with a slew of regulations and nobody is going to be happy. For instance, countries like China and India have banned their use altogether. In the USA, the agencies are tightening their noose and heavily regulating virtual currency. How long till the situation becomes a mess?
Many may despise Blockchain for its apparent benefits
One of the greatest myths is the Blockchain eating businesses of financial institutions. That’s entirely untrue and needs to be corrected immediately. However, smaller organizations that have long played the role of middlemen, facilitating transactions, valid or otherwise, and getting fat commissions became insecure in the initial years. Although big banks supporting the technology have helped eliminate the confusion, the technology fought hard for the credibility in the meanwhile.
What would happen to those commissions if Blockchain took over? This was confirmed by an ex-boss at Barclays and went on to say that banks tend to wish death upon the emerging technologies and go on to exert undue influence over the same.
Banks have tremendous powers and can directly or indirectly influence policy decisions. They may use such skills to regulate blockchain, reduce its usefulness and at the worst, stifle its availability to the general masses to enforce a slow, painful death upon it. Fighting the establishment was never going to be , and it has proven to be true in the case of the blockchain.
Scalability related issues
Some time back, stakeholders could not agree on the way forward for Bitcoin, the most popular cryptocurrency. This brings us to another boiling question – what about its scalability? However, this issue can be addressed given that some of the best minds are working over it day and night and we can have a solution for the same pretty soon.
The way ahead?
It’s too early to question any emerging technology. Blockchain, like others in the past, deserves time to justify its potential through more and more real-time applications venturing into the market. The enterprise must devote their attention to Blockchain without losing their grip over the current skills models. There’s a fine line between and that’s where they have to trek.