Blockchain technology was invented with a purpose of empowering the people to take complete charge of their transactions. Initially, it was associated with BitCoin, but gradually BlockChain technology has started foraying into other sectors as well- right from healthcare to education, media and more. This technology promotes decentralized methods of digitally maintaining/updating the records and finalizing various transactions. It offers a much-secured ecosystem without compromising on the fair transparency.
The records maintained using BlockChain technology cannot be tampered with, and the transactions do not involve dependency upon any central authority. It makes this technology the real “people’s technology” equipped with bringing a social change on a wider level. While the intentions behind using the technology are really good and appreciable, there are still a number of challenges on various levels that affect the different aspects of this technology. Such challenges limit the stakeholders and experts from realizing its maximum potential for the betterment of society and economy, Here are some of the key challenges that are preventing the BlockChain technology from offering maximum benefits to the population:
The Blockchain technology is too complicated to be understood by people with limited technical skills. Even people with decent technical knowledge find it very difficult to be understood. As a result, many people hire Blockchain developers and rely on their expertise for meeting their objectives.
- While the technology itself remains decentralized the technical knowledge to utilize it is centralized and condensed. Among only a few experts.
- This massive outsourcing to a few people has not only made the BlockChain professionals more expensive but is also against the “decentralization” objective behind BlockChain technology.
Difficulty in cost structure maintenance
While the transaction cost during the initial phase is very low or even negligent, it keeps on augmenting with the size of the network.
- Hence the unpredictable future costs can affect the fundamental business objectives of investing in BlockChain technology.
- Besides, it also puts the resources of the stakeholders at the stake as the investors with limited capital who are being misled by the BlockChain experts may find themselves in a situation where they can neither continue nor withdraw.
Serving Classes more than Masses
While the major objective of Blockchain technology is to decentralize the things transactions and helping the people maintain maximum transparency and reducing transaction hassles, it doesn’t seem to be working in the factor of masses at this stage.
- Instead, most of the users and adopters of blockchain technology are big corporate.
- Over a period, it might be limited to the classes and help in increasing the wealth of rich without offering the potential benefits to the end clients or masses.
Consumes massive amounts of energy
Blockchain works on Proof of work algorithm that might be compared to a very complicated IT puzzle and needs humongous amounts of energy for computation
- It makes working with blockchain technology extremely energy consuming process
- This will not only limit the use of Blockchain to just a few rich corporate but will also result in over-consumption of resources.
Does not support seamless syncing with old technologies
In order to ensure the smooth working, it is very important that any technology that is freshly introduced in the organization should seamlessly sync with the existing technology ecosystem of the place,
- However, the BlockChain technology is an ultramodern technology while most of the small organizations are using outdated technology when compared to BlockChain. Hence instead of smooth syncing the existing software needs to be modified in order to integrate it with the BlockChain technology.
- It not only adds to the time but also increases the overhead costs.>
Easy to be manipulated by clever employees
While the corporate BlockChain ecosystem is limited to the members of the same organization instead of going public still works on eh consent of the majority. In fact, there are even more possibilities of misusing this mandatory prerequisite in a factor of the dishonest employees.
- Most of the employees of the same organization know each other well or can make relations.
- They can also find some way out to manipulate the co-workers and taking their support to use majority consent fro their malicious objectives that can harm the organization.
Consent of majority
The process of Blockchain depends upon the consent of the majority of people. Hence if 50%+ people combine together to perform some “big fraud”, then they can manipulate the system for their own vested interests. It can defeat the very objective of Blockchain technology.
- While it can be argued that it is a hyperbole situation, we should also consider the fact that hackers and malicious elements are evolving at a very fast pace and can invent some technical means to perform this task.
- Apart from public transactions, the BlockChain technology can also be used for the various organizations. Thus the majority of staff can decide to manipulate this facility and may misuse it for their own vested interests.
Technology can do tremendous good to the society if used properly. In fact, we have seen the examples of ATM, net banking, online record maintenance and a number of other people-oriented technologies that have made the life easier and more rewarding while increasing the productivity of individuals and organizations.
The Blockchain is one such emerging technology that promises to be a turning point in the recent history of IT technology if it is used in an ideal manner. This technology works on the principles of decentralization and thus promises to empower the people. However, presently there are a number of restraints on different levels that are curbing the social growth of BlockChain technology and preventing many people from adopting this technology.
In this blog, we have highlighted some vital challenges faced by BlockChain technology that need to be resolved immediately if we don’t want to turn this highly beneficial technology into just a hype.