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Limitation of Blockchain Technology

Blockchain Technology has enormous potential in creating trustless decentralized applications. But it is not perfect. There are certain barriers which make blockchain technology not the right choice and unusable for mainstream application.

This includes:

Lack of Awareness

There is a lot of discussion about blockchain, but people don't really know the true value of blockchain and how they could implement it in different situations.

Limited available technical talent

Today, there are a lot of developers can do a lot of different things, but in the blockchain, there are not many developers that have specialized expertise in blockchain technology. Hence, the lack of developers is a hindrance to developing anything on the blockchain.

Immutable

Immutable means we cannot make any changes to any of the records. It is very helpful if you want to keep the integrity of a record and make sure that nobody ever tampers with it. But it also has a drawback in the case when you need to make any revisions, or you need to go back and make any reversals say somebody processes payment and need to go back and make an amendment to change that payment.

Key Management

As we know, blockchain is built on cryptography. Cryptography implies that there are different keys such as public keys, and private keys. When you are dealing with a private key, then you are also running the risk that somebody may lose access to their private key. This happened a lot in the early days when Bitcoin wasn't worth that much. People would just collect a lot of bitcoin, and then suddenly forgot what the key was, and those may be worth millions of dollars today.

Scalability

Blockchain like bitcoin has consensus mechanisms which require every participating node to verify the transaction. This limits the number of transactions a blockchain network can process. So, Bitcoin was not developed to do the large scale volumes of transactions that many of the other institutions are doing. Currently, bitcoin can process a maximum of seven transactions per second.

Consensus Mechanism

In blockchain, we know that a block can be created in every 10 minutes. It is because every transaction made must ensure that every block in the blockchain network must reach a common consensus. Depending on the network size and the number of blocks or nodes involved in a blockchain, the back-and-forth communications involved to attain a consensus can consume a considerable amount of time and resources.






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