Blockchain became the hottest technological trend when Bitcoin saw the light of the day. The technology is considered the next big thing and is revolutionizing the tech world, but it’s a new planet and still requires exploration.
Blockchain is witnessing exponential growth, credited to its distributed ledger and high-end security of financial transactions. By 2020, Blockchain is expected to have a market value of $60 billion, grown from $708 million in 2017. More industries are inspecting the possibilities and potential of Blockchain, and it is a matter of time before industries rapidly adopt it.
Risks and concerns are surrounding Blockchain and require attention. This article explores major challenging in the implementation of Blockchain.
Lack of Understanding of the Technology
Little is known about the real essence of Blockchain. The aggressive marketing has overshadowed authentic information. Companies wishing to utilize Blockchain do not have a thorough understanding of its implementation and execution. Also, companies rely on existing knowledge and do not conduct their research. It is essential to identify your business requirement and know how and where to use Blockchain.
Often companies expect a readymade Blockchain model for immediate implementation. Every business has different requirements. Having additional features lay extra pressure on the software while lacking desired features reduces the efficiency of the software. Therefore, enterprises need customized software solutions which enable their growth. A company must, accordingly, conduct its research to understand the needs.
Most Blockchain solutions are open source. Developers can customize the solutions and extend the development process. However, implementing Blockchain requires expertise. It is necessary to trust companies that provide software as a service, such as Microsoft and IBM. They will help you in writing smart contracts, for cost-effective and productive use of open source solutions.
Ethereum and Bitcoin, the both, faced higher fees per transaction and slow speed when the users increased exponentially. Cryptocurrencies faced problems in dealing with a large number of users, raising questions on the scalability of Blockchain.
One of the recommended solutions is the Lightning Network, an off-chain method relying on SegWit. Instead of changing the underlying software, it adds an extra layer to the existing system. The security is maintained, allowing more users to send and receive payments instantaneously.
Shortage of Experienced Blockchain Developers
Most of the companies are using Blockchain as a marketing tactic to attract clients. Since it’s an innovative and trending technology, various development and software companies are using Blockchain to reflect advanced technological services. However, ineffective Blockchain application is instead harming the technology’s reputation and proficiency.
One of the biggest challenges of Blockchain development is its cost. In pursuit of cheap packaged, companies opt for unreliable developers. It is vital to hire developers who have the passion for Blockchain and wish to deliver products with maximum utility.
You must trust reliable Blockchain developers, like Cubix, with proven records and seasoned developers. The technology has witnessed a rapid rise; therefore, creating a shortage of relevant skills. Very few companies have trained and well-versed Blockchain developers who can deliver perfect solutions.
Look for developers who have open source footprint and involvement, along with a technical team. Read the technical blogs written by your potential Blockchain-based platforms and try to grasp their learning.
‘The supply of people that have extensive Blockchain experience is pretty low’ – Jered Kenna, Bitcoin Pioneer Various online and traditional universities are now offering courses for Blockchain, to fill the skill gap. Universities like Princeton and Stanford are offering a wide range of courses that cover the fundamentals of Blockchain, smart contracts, Blockchain applications and more.
High Energy Consumption Mechanism
Mass adoption of Blockchain isn’t possible unless the excessive energy consumption is required. Most Blockchain-based platforms utilize PoW (Proof of Work) for consensus. The PoW use computational machine power for equations for verifying transactions and adding them to the data. These mechanisms consume excessive energy. For example, 0.2% of global electricity is consumed annually in validating Blockchain-based transactions equal to Bulgaria’s entire consumption.
Predictions suggest that Blockchain-based solutions will require more electricity than the entire world consumes today. The technology must explore alternative mechanisms which consume less energy and do not burden the energy reserves of the world.
The Shadow of Cryptocurrencies
Unfortunately, Blockchain gained popularity through Bitcoin. To date, Bitcoin and Ethereum are the most common and renowned implementations of Blockchain. It is essential to understand that Blockchain is a technology that facilitated cryptocurrencies, such as Bitcoin. Blockchain allows distributed ledger and eliminated the need for a central authority, such as banks. The cryptocurrencies utilize the platform of Blockchain and create digital assets that directly trade between the two parties.
People have reservations on the sustainability of cryptocurrencies and thus question the reliability of Blockchain. Blockchain is undoubtedly the future of technology. However, its mass adoption will take time, keeping in mind the challenges faced by Blockchain. Meanwhile, you must carefully choose Blockchain developers for maximum utility of the technology!