In this tutorial, you’ll understand the limitations of blockchain. because there are some limitations that make blockchain not the right choice for many different situations and you need to know those.
1. Early Stage
Blockchain is at a very early stage. And what that means is that there aren’t that many projects fully fleshed out and developed that apply blockchains.
There’s a lot of conversations, there’s a lot of plans. but actually developed proofs of concept that are successful and out there, still very early stage and they’re just not there.
2. Lack of awareness
This also is part of the whole lack of awareness, because there’s a lot of discussion about blockchain and people may have some buzz around it. but people don’t know the true value of blockchain and how they could implement it in different situations.
3. Limited available technical talent
This is also in part because there is a limited available pool of technical talent. There are a lot of developers that do a lot of different things but there’s not that many developers that have specialized expertise in blockchain and that lack of developments, that lack of developers developing anything on the blockchains.
Another key limitation of blockchains is due to one of its key strengths,
1. Blockchain is immutable.
The fact that it’s immutable implies that you cannot make any changes to any of the records. That’s wonderful if you want to keep the integrity of a record and make sure that nobody ever tampers with it.
2. No Modifications
But it’s really a horrible thing if 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. So the answer is if you’re using blockchains that’s simply impossible.
3. Key Management
Another key problem with blockchain is the concept of key management. As we mentioned, blockchain is built on cryptography and cryptography implies there are different keys. You have public keys, and you have private keys. But when you’re dealing with a private key you’re also running the risk that somebody may lose access to their private key.
Another key factor with Bitcoin and blockchain is scalability. so, as we mentioned Bitcoin specifically. because this is an area that’s being very severely addressed and Bitcoin is to get that scalability factor to the point. where it actually can handle large volumes because Bitcoin
was not developed to do the large scale volumes of transactions that many of the other institutions are Doing. It’s a work in progress, and so are blockchains.
5. Time to process
In bitcoin to be able to process a block, a transaction takes about 10 minutes and that’s because you have to get consensus across all the different nodes and that’s when you can actually get to the full consensus and get the transactions out. That’s 10 minutes but if you’re a bank that’s used to process transactions in a matter of seconds or if you need to do high-speed transfers and you need to handle things in a matter of microseconds. Blockchains is not the right choice for those.