Blockchain Technology: 7 Key Challenges
Updated on Feb 14th, 2022
The blockchain technology came out ten years ago. And all throughout the past decade, it has managed to hold the spotlight on itself. More and more industries are finding new ways of using it to their advantage. It is deemed as significant of a technological breakthrough, as the internet was when it first came out.
Now, nobody denies that it’s a fantastic technology with a lot to offer. But at the same time, it is possible that we are expecting too much out of it, too soon.
We claim that the blockchain technology will make our digital lives more secure. We say that it will help in securing election polls, prevent data thefts, make money transactions secure, provide financial anonymity, etc. But while all of it is very plausible, it is still not possible. It is so because of one simple fact that we often overlook- Blockchain is still a baby.
It has only been ten years since it came out, with the coming of Bitcoin. And we are already expecting it to cure all our problems. It’s like getting a fourth grader suited up and ready to stand in the presidential elections!
It’s unfair and downright absurd.
There are a plethora of domains which will, and already are, use the blockchain technology. But it is not all that easy to do it. Being such a new technology, very little is known about it. Many industries fail to properly adopt blockchain technology because everything about it is so unclear. A low population penetration is also a bothersome issue for blockchain technology.
Let’s take an example, in 1999, ten years after the internet was a thing, less than 5% of the world population had access to it. And even after three decades, in 2018, the internet is still at only 50% global penetration.
So now think of it this way, when it took internet three decades to be accepted by only half of the world’s population, how can everyone accept blockchain technology overnight?
It is the natural course of things; when something new comes in the market, over the years, it improves and gets accepted by the masses. The blockchain technology is being worked upon fiercely by many industries, but it will be a while till it can be all people expect it to be. Primarily, the blockchain faces seven major obstacles, let’s have a deeper look at what they are.
7 Challenges Faced By Blockchain Technology
1. No general use case
The supporters of the blockchain technology advocate that it is going to revolutionize the technology world. They say that it has many implementations and potential to achieve great things. From being borderless, close-to-free payments, providing universal authentication of goods, un-hackable data storage, verifiable crowd predictions, ensuring charity fund distribution, the list of potential use cases for it goes on and on.
Now while versatility is one of the blockchain’s prime plus points, but at the same time, it is also proving to be a hindrance. Since it doesn’t have just one primary use, but a myriad of many, it is hard to come up with a single path to achieving all of them. Every industry is using a different approach to achieve something unheard of with the blockchain technology. So this creates a lack of a generalized use case for the blockchain technology adoption.
2. Tough to Use
One thing which plays a crucial role in achieving high population penetration is, ease of use. Now there are tech geniuses out there who can follow the complicated steps involved with establishing a blockchain mechanism.
Kudos to them!
But most people are not that technically inclined and don’t want to spend hours learning something so dull as well. It’s a common human tendency, if something becomes too much of a hassle, we abandon it or avoid it all together. And unfortunately, blockchain is facing this problem quite acutely at the moment.
Because it is so tedious to achieve it, industries are reluctant to invest in it for now. But over the years we will come up with ways to make it easier for the masses, but right now sadly, it is the way it is.
3. Entry Level Barrier
The reason why most of the proposed uses for blockchain are still a fantasy is that it is incredibly hard to set up. Take internet for instance again, nowadays we plug in a wifi modem, turn it on and go crazy. It’s as simple as that, and that is the reason why it so vastly used these days. The blockchain technology needs to be just as easy to set up as well.
Currently, we need a dedicated team of intellectually chiseled programmers who can learn new languages and cook up custom codes to serve an industry’s needs. But for newcomers, there is no scope to survive in the market on their own. There are no tutorial videos or any reading material which can help them.
So if blockchain wants to succeed in the mainstream market, it will soon need proper study material and training modules.
Read More: Top Industries Blockchain Technology Will Transform
4. Dull speed
Currently, 1-5 TPS (Transactions per second) is the standard speed for most blockchain networks. It is not enough, not by a long shot. In an age where we can download data from the internet at 15 Mbps speed, we have grown addicted to fast services. So if blockchain technology wants to become a mainstream thing and penetrate a larger population, then it needs to speed things up, literally.
5. Heavy Energy Consumption
We are, on top of being a hasty and impatient generation, also an environmentally conscious age as well. Trying to minimize our carbon footprint and looking for alternative fuels, we are working ceaselessly in preserving our environment. So in such an era, the amount of power a blockchain infrastructure requires to run is unacceptable. A recent study shows that Bitcoin infrastructure eats up approx 7.7 GW power annually- almost as much electric power as Ireland uses!
This ridiculous amount of power consumption is one of the prime obstacles for blockchain to overcome. Till then, there is no possible way for it to go mainstream.
6. Lack of Regulations
Bitcoin brags that all the money transaction on it is unregulated, or decentralized. It is the main reason for its popularity. But at the same time, it is proving to be a bothersome bump in the road for blockchain technology.
Because there is no one governing this thing, people are wary of trusting blockchain. Humans have always feared what we don’t understand. And since nobody is there to guide us through the setup process, or tell us what the rules are or whom we should contact in case of an emergency, we are pretty much left on our own. And that’s a scary thought.
Furthermore, an unregulated forum always gives off the vibe of being in a constant state of anarchy. So for blockchain to become a part of people’s everyday lives, it will need to have some governing structure, which will work as its token of authenticity and make it seem legit.
7. It needs to stop being such a big thing
While blockchain is exciting and promises great things, we are talking about it way too much. With the slightest mention of it, we launch straight into nerd mode and try to explain how it works. Now while this level of enthusiasm is understandable for people like us, those who like knowing about all this stuff, but not everyone wants to know about it. Everywhere we go, we try to hand out free information about blockchain. Every time, even the slightest mention of the blockchain, makes our ears stand up like antennas. That is because we have turned it into such a big thing.
And that right there is yet another obstacle which blockchain technology needs to overcome. Masses need blockchain to infuse in their daily lives, without standing out so much. Not everyone cares about how it works; they only care about what it can do.
So if an app uses blockchain technology to authenticate users, then this information should be passed along without going all infomercial about it, because it makes people uneasy.
The blockchain technology, no doubt, is a big invention and it has the potential to grow into something marvelous. It has a plethora of implementations which can make the world a better place. But every tree needs to be nurtured properly and mature before it can start meeting our demands. The blockchain technology is still in its infancy, and it needs time to grow and evolve. So whatever your thoughts might be about it now, you don’t need to lose hope on it, you just need to expect a little less from it, at least for now.
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