Blockchain, certainly not the complete remedy
Apr 09, 2018 Posted / 626 Views
Blockchain Technology has become like the hymn of the Year. No matter what field or which discipline we look around we tend to find Blockchain technology's application almost everywhere. From bringing a transformation in the electoral system to completely revolutionizing the financial system, blockchain technology is really helping us to solve the real world problems. But as the law of conservation of energy prevails and is valid for each and everything. When we were stuck and tired of the government financial services, tamper electoral system, emerges a solution, that too, from an anonymous personality, solving most of the real world problems should definitely be having some huge cost. The cost might not be visible or felt instantly at this moment but am pretty sure that it will cost a lot. Probably, We might feel this cost in the future.
Entitled as the next best thing the world has ever experienced after the invention of the internet. When compared with the parallelly booming Technologies like Machine learning, Artificial Intelligence, and Internet Of Things, the Blockchain Technology seems to have a dominance over the market by providing data transparency and also saving it from fraudsters.
So let us understand a few drawbacks which certainly doesn't make blockchain as the best technology ever.
The blockchain technology provides a very efficient method in securing the data whatever has been uploaded on the blockchain but it doesn't verify or has any algorithms to cross-check that the data itself is reliable or not. For example in an Identity Management related blockchain. If the person at the first place itself enters his manipulated data then there is no way that blockchain can verify that that entered data is valid or not. It just takes the data and stores it in the blockchain which then becomes immutable. Hence the person verifying the data on the other side tends to believe that it is a perfectly authentic data. The only person in this case which can be trusted is the authority which is uploading the data to the blockchain.
The blockchain technology was definitely built to overcome the trust issue. On a superficial level, it seems that blockchain Technology has to be victorious in solving trust issue. It was meant to eliminate all the third parties within any form of a system. If we observe carefully, the blockchain technology, do consist of a third party in the form of smart contracts. If two people are meant to have a transaction then traditionally, a third party is appointed and both the parties have to trust the third party. Here the third party is just personified to smart contracts.
Furthermore, the idea that the cryptocurrencies are backed by literally nothing sends chills down the spine. The value of Bitcoin raised exponentially due to the herd behavior and also just due to the people's belief in it. In other words, its value is completely dependent on us only.
Mining Bitcoins rewards people with some Bitcoins itself. This incentivization has led people to mine Bitcoin at a very rapid rate. The mining has already reached such a level that it is consuming more electricity than a whole country itself. This fact is evident from the shift of people from laptops, desktops to Application Specific Integrated Circuits (ASIC).
Adding on to the mining of Bitcoin the current proof of work of the cryptocurrencies also consumes a lot of electricity which has left the mining process inefficient and expensive. A new proof of stake (poS) mechanism is tried to replace the proof of work (poW) mechanism. However, its adoption is still in its early stages who's problems we might identify later.
In order to, for a new user, to join as a full node into the blockchain network, it has to download the whole database of the blockchain network from its existence. Since the blockchain technology is and was booming like no other, the number of transactions that are already recorded on it is also massive. This is due to the fact that any transaction on a blockchain network cannot be removed or altered. The current Bitcoin blockchain size accounts for 163 GB.
This particular argument is not related to the blockchain technology directly but is associated with the industry managing it. Mt. Gox issue is a very unambiguous example of a great loss due to mismanagement.
From the intervention of the financial authority to the complete Ban of cryptocurrencies. Also from hacking to complete system failures to the intervention of the government the list of hurdles is just never-ending.
As we are human beings and one of the clear evidence for it, is that we commit an error. Human beings are liable to errors. Many times it is observed that a person accomplishes a transaction with a wrong person. Being no intermediaries in the system once the transaction is done it is done and is irrevocable. It just can't be reversed back at any cost because that is the core feature of Blockchain Technology.
Similarly, when a wallet address is somehow forgotten by the user there is no “Forgot wallet address?” option available here.
This is the precise reason which can be quoted for approximately 25% less availability of Bitcoins being used for transaction these days and also in the future.
The list of problems related to the Blockchain Technology continuous due to the anonymous nature It is extensively being used for all the illegal activities and also it is too complicated for the general people to understand. The future of blockchain Technology can't be predicted just by discussing the pros of it.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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