Blockchain Technology: The Challenges That Prevent Its Widespread Use
Many people firmly believe in the potential that blockchain technology possesses. The concept of consensus within a distributed network, rather than a central authority, is integral and can bring benefits to the financial sector, digital rights management systems, voting systems, supply chain control, and many other areas.
But there are some problems with the blockchain. Recognition of obstacles that may prevent blockchain from spreading is also an important aspect. A clear understanding of these barriers will facilitate their study at an early stage of the blockchain implementation curve and will make the blooming blockchain ecosystem more likely in the future.
With this in mind, it is worth noting five major problems that should be thought of when considering this technology.
Threats in the digital environment are a challenge in every sense of the word. This is especially relevant
in connection with the growing range of services that are based on the blockchain. This is due to the fact that in addition to the traditional ability of attackers to adapt to the rapidly changing digital landscape, the blockchain ecosystem is also changing much faster than technology in other areas.
Currently, new systems, services, and approaches to the blockchain are being developed and deployed, which are used almost daily. For people building blockchain products, this means that they cannot take advantage of the same informational advantage over hackers to work in a more traditional and stable environment. You should contact blockchain companies for your blockchain app development.
Finding the right balance in regulation
Excessive regulation may hinder the process of innovation. But it would be unrealistic to say that the blockchain does not require any regulation at all. In the end, this technology is already used for remittances, contracting and issuing securities. This implies the breadth of the existing legal and regulatory framework, which often lags behind progress and does not correspond to reality.
As a result, it is important for users of blockchains to understand the need to interact with legislators and regulators so that the latter can better understand this technology and its perspectives. Based on this, the necessary laws and regulations should be applied and updated so that they support progress, rather than impede the development of innovation.
ICO growth
The Initial Coin offering (ICO) has become a popular approach to raising capital in the cryptocurrency sphere, as they bypass many obstacles that are associated with a more traditional process of raising funds by creating venture capital. But not all of them are really reliable projects that can provide a return on investment.
Another potential problem is that the funds raised in the ICO sometimes do not completely correspond to the actual financial needs of the company. The fact is that too much money can kill a startup just like a lack of funding. When there is too much money in the initial stage, financial discipline tends to go beyond the established framework. Companies often hire too many people without sufficient diligence to select them, overpay for some services and lose focus when it comes to developing the final product.
A software company does not need millions of dollars to develop and launch a product. Bringing in millions of dollars by an ICO based simply on the White Paper may be the reason for the short-term rejoicing of the company's founders. But for investors, this situation carries a hazy outlook for the funds invested in the project.
Not every ICO is bad but it is necessary to approach this question with a due share of realism. Most startups funded through an ICO do not succeed. You should contact blockchain companies for your blockchain app development.
Integrity risk
It is often said that the blockchain has absolute integrity and cannot be compromised or changed. But this is a simplified view of technology. First of all, it is worth noting that there is more than one chain in the world. There are many blockchains. Some are more reliable than others.
Secondly, a chain that has integrity today may lose it in the future. For example, typical systems based on an algorithm for proof of work (for example, a Bitcoin network) are designed with the assumption that no network unit can control more than 50% of its capacity.
A network of nodes that collectively manage a blockchain may evolve over time. It is, including the ways that can lead to dramatic changes. For example, lead to the fact that the key assumptions underlying the integrity of the system will no longer be executed. Considering that blockchain technologies are being promoted for serious applications (real estate registries or corporate records) that require integrity spanning years or even decades, you need to think more about mechanisms to ensure that relevant ledgers remain reliable during these time periods.
In addition, you need to think about what to do if a critical blockchain suddenly loses its integrity.
To say that there is too much hype around blockchain technology is to say nothing. Despite the fact that some experts claim that blockchain is a panacea for all problems, in fact, there are many areas where replacing existing systems with blockchain variants does not make much sense.
Why is this so important? This is because excessive use of this technology has its costs. When bright predictions are not realized, then against the background of a loss of trust, it becomes increasingly difficult to implement new solutions in the blockchain. This concerns many entrepreneurs who try to avoid oversupply and are working to offer investors well-designed offers and products designed for a specific market. You should contact blockchain companies for your blockchain app development.
Melissa Crooks is Content Writer who writes for Hyperlink InfoSystem, one of the leading app development companies in New York, USA & India that holds the best team of skilled and expert app developers. She is a versatile tech writer and loves exploring latest technology trends, entrepreneur and startup column.