Blockchain Limitations: 3 Things To Keep In Mind

The blockchain has some technical problems that make it imperfect and impractical for the mainstream use of today. Though a lot of effort is put to solve these issues, we need to be realistic and to address all the problems we can. Some of them are:

1. Scalability Issues

When we talk about scalability, we need to know that every blockchain consensus protocol has some limitations: all of the nodes that are participating in the network must process each and every transaction. A decentralized consensus mechanism offers us all the benefits of the blockchain we want. But, decentralized mechanisms limit the number of all transactions the blockchain can process to the limit of a single participating node on the network. This means that the blockchain can process only a limited number of transactions.

Also, it takes a lot of time to process a block of transactions. For example, Ethereum block time is about 15 seconds while Bitcoin’s is about 10 minutes. And sometimes it can take even longer. More storage and computing power is required when the size of the blockchain increases.

2. Privacy Issues

As long as users hold on to their pseudonym, it’s all going to be ok. But if somebody makes a connection between the pseudonym and the individual the secret is out in the open. There was a case where law enforcement agencies identified Bitcoin users during investigations. This is clearly breaking the entire point of a blockchain’s privacy.

3. The Block Size

The transaction times depend on the block size. When the block size grows it gets harder to process a transaction.  This happens because the verification of each block takes a lot of time and it’s one of the biggest limitations of the blockchain.