Blockchain for Dummies: A starter's guide to understand the blockchain Part 5 - Disadvantages of the Blockchain

thebatmanbiker (62)in #blockchain • 6 years ago

In the last post on Blockchain for Dummies, I wrote about the difference between blockchain and bitcoin because blockchain is not "that bitcoin thingy", and mentioned more than a few advantages. There are some inherent disadvantages to the system too, and I will write about them in this post.

Permanent records

What is an advantage with the blockchain is that records and additions are permanent. Permanent records can be a good and bad thing. Sometimes, one wouldn't want each and every activity of theirs logged permanently, because everyone can see it. Mistakes might happen, and having them permanently recorded is not a great thing.

So next time, think before you post on Steemit!

Energy intensive

Blockchain is an energy intensive system. According to what I read, the managing of the system for the Bitcoin cost around $156 million in energy costs in 2017*. The good thing is that the cost of managing the system is spread among the users of the network. It is still a large amount of electricity consumption, however.

*figures vary, but they are centered around the 140 - 180 million range

Legal issues?

The regulation of the system has come a long way since the early days of inception of blockchain and bitcoin. But with the current level of understanding of the network by governments and law makers around the world, it is possible that regulations may be incorrectly drafted.

The system makes users anonymous, and that can be a good/bad thing. Usage of bitcoin for illegal transactions is quite high especially within the deep web.

Currently, at least in India, the government's take on bitcoin and cryptocurrencies in general is very dim indeed, and that is mostly due to lack of understanding and strong arming by the banks.

Development of the blockchain has no governing body. This makes sense, as the system is decentralized, and having a governing body means having a central authority on the development of the network. The problem that can come up is that development of the blockchain is free for all, and could be misused.

That's not a lot of disadvantages to the system. No system is utopian, and so is the blockchain. But then, the advantages far outweigh the disadvantages if the system is used well with forethought.

One of the major issues that needs to be solved now is the use of blockchain and cryptocurrency because they are on the rise and will continue to grow. Governments around the world need to regulate it rather than banning it outright due to ignorance.

And that's that.