Another one of the challenges of implementing blockchain is scalability. In reality, blockchains work fine for a small number of users. But what happens when a mass integration will take place? Ethereum and Bitcoin now have the highest number of users on the network, and needless to say, they are having a hard time dealing with the situation.
Blockchains Can Be Slow
The blockchain is complex. That’s why it takes more time to process any transactions. Also, the encryption of the system makes it even slower. Although they claim to be faster than traditional payment methods, still, in some cases, they can’t deliver it.
Completing a transaction can take up to several hours. So, if you want to pay for a cup of coffee, it will cause you trouble. It’s most suited for making large transactions where time isn’t a vital element. It’s an element of risk. And wasn’t it supposed to remove the ‘unsecured’ nature of blockchains from the equation?
Theoretically, the principle extends to blockchain networks that use something other than store value for example, logging transactions or interactions in the IoT environment.
These channels in fact, even computer files can become slow and impractical. It’s not the case always. It only slows down when the network is staked with too many users. The more it grows, the slower it gets.
High Energy Consumption
Energy consumption is another blockchain adoption challenge. Most of the blockchain technology follow bitcoins infrastructure and use Proof of Work as a consensus algorithm.
However, Proof of Work is not as great as it looks. To keep the system live, it will need computational power. You probably heard about mining.
Mining will require you to solve complex equations using your computer. So, your PC will take more and more electricity to overcome this situation when you start mining.
Lack of Privacy
Blockchain and privacy don’t go really well with each other. The public ledger system fuels the system, so full privacy is not the first concern.
But can any organization function without privacy? Well, no. Many companies that work with the privacy needs to have defined boundaries. Their consumers trust them with sensitive information.
This is an essential requirement in the case of bitcoin and other cryptocurrencies. On the other hand, this raises some concerns for governments and companies. Governments and companies always need to protect and restrict access to their data for various reasons.