Blockchains are a decentralized database that works as distributive ledgers. These distributive ledgers store a record in a chain of blocks that are linked with each other through a cryptographic hash function algorithm, and these blocks are organized in chronological order.
The advent of blockchain technology in the recent past has disrupted many industries, such as the financial services sector, the health care sector, and the pharmaceutical sector. Aside from that, many large scale organizations are harnessing the potential of blockchain technology to automate their streamline business processes.
For instance, Walmart, the world’s biggest retail store, leverage the potential of blockchain technology for its food traceability program,
Blockchain technology offset the security concern of many large scale organizations and firms. As blockchain technology is entirely decentralized so it requires a more storage capacity as compared to a centralized database.
Now I’ll be discussing some of the well-known drawbacks and flaws of blockchain technology.
Blockchain-based cryptocurrency bitcoin is protected by the most precise and extremely secure proof of work consensus algorithm. However, some security loopholes within this algorithm make it vulnerable to attacks and the most prominent of all these loopholes is 51% attack.
A 51% attack will most likely occur if an individual has managed to gain access to 50% of the network hashing power, which would allow an individual to disrupt the whole blockchain network by diminishing the ordering of a transaction
Despite being the fact 51% attack is theoretically possible, but till now one has been able to execute this attack on the bitcoin blockchain network.
As the blockchain network scales up, the security enhances, and is quite unlikely that miners would invest their valuable resources and money in attacking the network because they were getting more rewards for acting honestly instead of participating in any unethical activity.
Aside from that, 51% – attacks will only be able to modify the most recent transactions that have executed recently and the old blocks remain immutable because all the older blocks are closely linked together through a cryptographic hash function algorithm.
In order to modify older blocks, a behemoth amount of computing power is required that is practically impossible.
Another most frustrating aspect of blockchain that may restrict large-scale organizations and individuals from adopting it is that once the data get stored into the chain of blockchain, it is practically impossible to modify or remove it.
Even though data immutability is amongst the greatest advantage of blockchain technology, but it might be disappointing for some peoples or organizations.
Modifying the data stored within the chain of blockchain is a bit cumbersome, whenever you try to modify the already stored data, a unique cryptographic hash value is generated by the cryptographic hash function algorithm.
Blockchain technology makes use of public-key or asymmetric to give its users ownership over their crypto assets or their blockchain data. Each blockchain address has a unique private key. Even though the blockchain address can be publicly shared, but the private key must be kept confidential.
Private Key works pretty much the same as the bank account because the users need the private key in order to gain access to their account.
Users may lose all his/her crypto assets of sensitive data if the private key is lost, and there is no way other than the private key to access an account.
The proof of work consensus algorithm leveraged by the blockchain is extremely inefficient. Since the consensus algorithm involves the mining process and mining is an extremely competitive process as it requires a specialized kind of hardware equipment and energy resources.
After every ten minutes, there is only one miner so the work of every other miner goes in vain.
As the miners are consistently working to skyrocket their computational capacity because by enhancing the computational capacity the chances of getting the valid block hash enhances that’s why the resources used by the bitcoin blockchain network have increased dramatically since the last few years. Currently, bitcoin is consuming more energy resources than countries like
Denmark, Ireland, and Nigeria.
Blockchain ledger can grow exponentially over time. The storage capacity required by the blockchain network is currently 20 GB
The recent growth in the blockchain size would most likely outstrip the growth in the hard drive and eventually, the risk of losing the nodes within the blockchain network arises because the enterprises or an individual do not have sufficient space in their hard drive to download the ledger completely.
Blockchain technology isn’t as simple as the peoples think about it. Non-techies won’t be able to grasp this technology easily. Nodes, cryptography, and mining all these terms sound a bit weird to you, but you won’t be able to enjoy the trustworthy services unless you understand it completely.
Require More Resources
The blockchain network relies completely on the nodes to run successfully. Old and famous networks have sufficient nodes within it in order to run successfully, but the new blockchain network lacks the number of nodes to facilitate widespread use. Nowadays nodes need more rewards for their participation in the blockchain network.
As the nodes are already putting their time and resources to run the network effectively, so they expect the highest returns over their investments.
If you need to create a new blockchain network, you need to spend your time and resources to facilitate node and take care of all the other security-related concerns.
As you might be aware of the fact blockchain is completely immutable, therefore before placing the data into the blockchain, you need to make sure that the data you entered is 100% correct because you won’t be able to correct it afterward.
Apart from that, the blockchain network is accessible by the private keys. You need to keep your private key safe and secure because if the private key is lost all the valuable data and cryptocurrencies are lost. So, in this way, blockchain technology requires more precision and accuracy than any other traditional record-keeping system.
So far we’ve discussed a bit about the drawbacks and flaws in blockchain technology. This technology has grown dramatically since the last few years and many industries are already leveraging it to automate record-keeping processes.
It’s a bit too early to decide is blockchain technology commercially feasible as this technology is still going through continuous beta testing.
Please let us all know what you as a reader think about it?