Top Advantages and Disadvantages of Blockchain Technology
Blockchain Technology, a much-talked term these days, can pave its path in almost every domain and industry. We won’t wonder if you say that you find blockchain all around you as it’s the reality.
But, blockchain is a mixed bag having the right balance of advantages and disadvantages. To make most of it and use it for the betterment, having an in-depth understanding of both aspects is crucial.
In this blog, we’ll present you with a crisp overview of the advantages and disadvantages of blockchain technology so that you harvest the maximum benefits of this inventive technology.
Top Ten Disadvantages of Blockchain Technology and Opportunities For Blockchain Development Companies
The world is in awe with blockchain technology and when you’ll pay attention to its benefits, you’ll be able to understand this fetish is not without a point.
The endless benefits and opportunities of blockchain technology are lucrative enough to adopt it without giving a second thought. But, there are some downsides as well, knowing which is crucial. Next, we present the key disadvantages and opportunities to solve them.
#1 — Performance issues
Performance is not seamless with blockchain and has certain limitations. For instance, it can only process seven transactions per second, it consumes too much energy, and it’s not a huge distributed system. With all these performance issues it’s not possible to have blockchain as a scalable solution.
Opportunity: Blockchain development companies can use Hyperledger to expand their performance. When it comes to scalability, the issue can be easily curbed by increasing the dependency on fiat currency a bit. As compared to Visa, blockchain’s scalability fades out. So, blockchain development companies need to make this technology ubiquitous, which is only possible by making it as common as fiat currency.
#2 — Not an environmentally friendly option
One of the most extensive implementations of blockchain technology is cryptocurrency and mining of cryptocurrency is too much energy exhaustive. This could be a threat to the environment and is not considered a long-term solution.
Opportunity: One can save the environment while using blockchain technology with practices like tracking energy sources, supporting peer-to-peer systems, scaling the behavioral incentive, and implementing the energy in the right resources and right manner.
#3 — Multiple security layers
Blockchain demands the implementation of multiple security layers that are too complex, resource-intensive, and tedious.
Opportunity: If it seems too tedious to add security layers, use solutions that are already packed with them. For instance, use a VPN.
#4 — Not 100% secured
It’s true that blockchain technology is secure more than its relevant technologies. But, it’s not 100% secured. The technology is prone to DDoS attacks, crypto-jacking, and double-spending. Dangers are around you in its case as well.
Opportunity: The security of blockchain can be better than before if private blockchains are backed with contracts, controls, covenants, and cross-monitoring systems. Participants should be allowed to view and manage the transactions.
Implementation of identity management will also improve the security of blockchain technology as it will track who is making which transection.
Read More: Best Blockchain Projects in 2022
#5 — Limitations with implementations
As cryptocurrency can only work with updated and modern-era systems, organizations using the legacy systems won’t be able to make most of it. Hence, its implementation is limited.
Opportunity: It’s clear that blockchain is not a middleware that can pair with legacy systems just like that. But, there are opportunities to ensure its implementation on legacy systems. For instance, adding an access layer and smart contracts will work.
#6 — Anonymity is a myth
Since the beginning, the promoted anonymity of blockchain was glorified like anything. But, it’s a myth as 100% anonymity is not all possible with blockchain. The anonymity granted by blockchain technology is pseudo-anonymity as one can always find out the company’s bank balance and payment patterns.
Opportunity — With the use of technologies like Tor, VPN, and distinct crypto addresses, the present anonymity of blockchain technology can be improved and secrecy can be maintained.
#7 — Talent and Maturity
This technology is still new and will take some time to be matured. There are few professionals in the market who have mastered this technology and their service comes with a high cost. So, if you want to use this technology, get ready to deal with talent crunch and high talent management costs.
Opportunity: To fill the talent gap, make sure you work a lot on the blockchain under trial projects. This way, one is able to hone the skills and ensure improved output.
#8 — Too much cost-demanding
Getting started with cryptocurrency is too much costly as one has to hire specific developers, have to build the required infrastructure, and spend greatly on security measures. The huge initial investment makes it an option only for selective businesses.
Opportunity: Make most of the pre-built modules, present in MESG marketplaces, to speed up the blockchain implementation and control the cost.
#9 — Privacy is a serious concern
As well all know, blockchain technology is very transparent and this transparency kills privacy. Everything happening in blockchain remains in the hands of network nodes. Hence, those who are present in the network have access to that data. There is no privacy at all.
Opportunity: Using decentralized and self-managed identities work best to maintain user data. Also, blockchain development companies can use a zero-knowledge proofs algorithm for accessing only the permissible data.
#10 — Cost of implementation and Maintenances
The cost burden, imposed by blockchain technology doesn’t end with resource procurement. It goes on with the implementation and maintenance. Even if solutions like Hyperledger are open-source, a huge in-direct investment is demanded by this technology.
Opportunity: Monetizing the blockchain development and implementation process will save huge costs. Outsourcing the skills, implementation expertise, and other resources is also a great way to keep the cost under control.
Blockchain technology is the future and is going to reap multiple benefits if one learns the art and science to deal with existing potential issues and improve its performance.
For a diligent and perfection-seeking blockchain development organization, there is no dearth of opportunities. All they need is commitment and expertise. They will fix the existing performance issues of blockchain technology and will come up with a near-perfection solution. So, if you need to have a blockchain technology that is flawless, take a trusted blockchain development organization on board. Rest will be taken care of by them.