- Slower process
Blockchain can slow down when there are too many users on the network
- High energy consumption
Some solutions consume too much energy
Bitcoin uses the Proof-of-Work consensus algorithm that relied on the miners to do the hard work. The miners are incentivized to solve complex mathematical problems. The high energy consumption is what makes these complex mathematical problems not so ideal for the real-world.
Blockchains are sometimes inefficient due to how they operate
Use Bitcoin as example:
First of all, when I tried to set up the bitcoin miner on my system, I quickly found out that the ledger can easily cross 100’s of GBs. It was not efficient in data storage which can lead to storage problems for multiple nodes who want to become part of the network.
- High cost
Blockchain implementation is costly process
Blockchain doesn’t offer interoperability as of now
- Harder to scale
Blockchains are harder to scale due to their consensus method
The transactions are completed depending on the network congestion. This problem is related to scalability issues with blockchain networks. In simple words, the more people or nodes join the network, the chances of slowing down is more!
However, all these solutions are still not at par with the centralized systems. If you compare Bitcoin and VISA transaction speed, you will find a huge difference between them. Right now, Bitcoin can only do 4.6 transactions per second. In comparison, VISA can do a whooping 1700 transactions per second. This means that in a day, it can do 150 million transactions per second.
- Data is immutable
Blockchain cannot go back as data is immutable
Users have to maintain their own wallets or else they can lose access
Users Are Their Own Bank: Private Keys – if you as a user who forgets its private key, are eventually logged out of their wallet and no one can get it back.
- Still not mature
It still has a long way to go before it matures and get standardized
It’s hard to integrate into legacy systems
DLT: Distributed Ledger Technology