3 things that currently hinders the mass adoption of blockchain technology
Introduction
Sin the invention of Bitcoin, cryptocurrencies and blockchain as a whole have seen steady, sustained growth. Lots of industries have experienced blockchain disruption. Blockchain technology is now applied in various sectors such as education, banking, finance, helth, insurance, and a hot of others. The future seems bright blockchains as the sustained growth seen in recent times has given doubters a run for their money.
No matter the progress recorded so far in blockchain technology, some design bottlenecks have made it nearly impossible to reach its full potential and arrive at mass adoption. Here are 3 of these challenges:
1. Scalability The amount of transactions that blockchains can process in record time is very small when compared with traditional systems. Take for example VISA. This platform can process about 24,000 transactions per second. Compare this speed with say - Ethereum. Ethereum can Ethereum can handle approximately 20 transactions in a second. Bitcoin is even slower with about seven transactions processed per second. In a fast-paced and modern world like ours, blockchain technology is too slow to handle real-time data processing demands. This hinders the implementation of blockchain technology into main-stream sectors and industries.
2. Global standards: There are industry standards in every technology of invention today. But there seems to be no such available in blockchain technology. For example, there are many different concensus algothrims that are implemented across blockchains. Some use proof -of-stake. Others use proof-of-brain. While others still combine some algorithms. Taking the best of what is available in each. Because there are no universal standards of operation across blockchains, it becomes even more resource intensive. For example, new users must learn how each blockchain work and this makes mass adoption more difficult. The same goes with running and maintaining projects built across blockchains. Because there is no uniform standard of operation, costs are incurred as each system is unique.
3. Security: Blockchains are usually used to store valuables in form of digital properties. Because of frquent cases of hacking and system intrusions, its becoming increasing risky to store values on a blockchain. There has been cases where bitcoins worth millions or even billions of dollars were stolen as a result of hacking. Also, identity theft or loss of valuable human data has made various organizations think twice about using blockchains. No system perfect. however, blockchains must be made as secure as possible before we can hope to see them replace mainstream technologies.
Conclusion
We all hope to see the day blockchain technology will completely replace traditional systems. But before that can happen, the challenges listed above and many others must be fully addressed. I hope that happens in my lifetime because I love blockchain technology.
"We all hope to see the day blockchain technology will completely replace traditional systems."
NOT All!
I rather doubt that blockchain technology will ever replace traditional systems for a number of reasons:
There is only very minimal acceptance of crypto currencies by merchants, and virtually none by traditional banks, despite crypto being around now for several years.
Blockchain wallets (regardless of type) can be hacked. If and when that happens, you will have lost all your money. Traditional bank accounts on the other hand, cannot be hacked. Your money is safe with them.
Deposits made to crypto accounts are not insured. If a traditional bank goes out of business, your deposits with them are insured. If on the other hand a crypto exchange goes out of business, you will lose everything.
Transacting in crypto depends on the internet. If portions of the Internet went down for any reasons, as could easily happen with a terrorist attack, you would have no access to your funds.
Crypto transactions can not be reversed as is the case with traditional credit cards transactions, or even some wire transfers. Thus, when fraud takes place with a dishonest crypto merchant, who does not ship products, or what ever, buyers lose their money. Banks and Governments will never allow this to happen.
Thinking that crpto institutions will continue to operate without heavy government control is being very naive, and once that happens, its back to square one...no better than with traditional currencies, in fact, a lot worse.
No my friends, for these and many other reasons, crypto currencies will never replace traditional currencies at any significant volume.
Indeed, not all people hope to see the rise of crypto currencies. Warren Buffet called bitcoin "rat poison squared." Bill Gates is well against it, and congressman Brad Sherman is trying to outlaw it. Many perceive those who are already on top of the current system as being against a new one. But many view central banks as working against their citizens and think that separation of state and money is a good thing, but still a thing that those currently in control of central banks would be well against.
Don't get me wrong! When it comes to making money, I am just as willing as anyone else, and I currently see a lot of opportunities to do so within the crypto space. I might even go so far as to say that there are a number of coins which will likely find a niche market in which to operate, and do quite well there, relatively speaking. What I do not see however, is crypto taking over any significant portion of the existing traditional currency marketplace. Crypto currencies just do not have what it takes to instill any significant degree of confidence in either merchants or consumers, nor is it likely that they ever will. Their very design confirms that fact to all, except perhaps the relatively few who stand to become super-rich if such a global adoption were to ever take place. Crypto itself is not dead, but its chance of ever carving out a significant share of the global currency market, is dead. That will most likely never happen!
You have a point. However, We we have to wait and see what becomes of cryptocurrencies in the nearest future. As for crypto enthusiasts, they will as optimistic as ever. Whatever happens, it seems that cryptos will return some real-world application.
"Whatever happens, it seems that cryptos will return some real-world application."
I agree! But unfortunately, therein lies the problem. Take Ripple and XRP for example. I have no doubt that the crypto technology developed by Ripple will be sufficient enough for Ripple to carve out a sizable space for itself in trans-border transactions, such as its partnership with Moneygram, and others. But what about its coin, XRP? There is not a shred of reliable evidence to show that XRP adoption will ever follow, especially given that the Ripple technology can operate without XRP. So, Ripple does well, and its owners all get super-rich, but what about XRP holders? They could quite easily be left holding a bag of useless coins, with no real value, or at leave no value beyond its current level.
What investors need to realize that when they invest in crypto coins, they are only investing in the coins, and NOT in the companies behind them, and that is what really needs to be regulated. Imagine buying traditional shares in a company, but not really owning part of the company, or having any say into how the company operates. I really don't think such a company would have many shareholders.
Look at d.tube and what happens there yesterday. Unfortunately, it's not that kind of technology I will bet my life on. https://steemit.com/blockchain/@koenau/d-tube-hacked-or-forever-gone
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