Blockchain, mostly known as the backbone technology behind Bitcoin, is one of the hottest and most intriguing technologies currently in the market. Since 2013 Google searches for “blockchain” have risen 1900%. Similar to the rising of the internet, blockchain has the potential to truly disrupt multiple industries and make processes more democratic, secure, transparent, and efficient.
Challenges in Blockchain Technology
- Nascent technology
Resolving challenges such as transaction speed, the verification process, and data limits will be crucial in making blockchain widely applicable.
- Uncertain regulatory status
Because modern currencies have always been created and regulated by national governments, blockchain and Bitcoin face a hurdle in widespread adoption by pre-existing financialinstitutions if its government regulation status remains unsettled.
- Large energy consumption
The Bitcoin blockchain network’s miners are attempting 450 thousand trillion solutions per second in efforts to validate transactions, using substantial amounts of computer power.
- Control, security, and privacy
While solutions exist, including private or permissioned blockchains and strong encryption, there are still cyber security concerns that need to be addressed before the general public will entrust their personal data to a blockchain solution.
- Integration concerns
Blockchain applications offer solutions that require significant changes to, or complete replacement of, existing systems. In order to make the switch, companies must strategize the transition.
- Cultural adoption
Blockchain represents a complete shift to a decentralized network which requires the buy-in of its users and operators.
Blockchain offers tremendous savings in transaction costs and time but the high initial capital costs could be a deterrent.
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