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5 Hurdles Blockchain Must Overcome
By Kapil Rajyaguru
When it comes to streamline conventional validation processes that need scalability and transparency, blockchain technology has shown huge potential. However, the technology faces a plethora of blockchain adoption problems.
The five main problems for blockchain adoption are:
1. Security Concerns
Decentralized blockchains are more susceptible to 51% attacks than centralized ones.
Almost 51% attack works by exploiting an inherent loophole in decentralized systems that allows users to control a chain by wielding over 51% of the processing power. This mostly happens on networks using the proof-of-work (PoW) standard.
Successful 51% attacks allow hackers to reverse transactions, invalidate new transaction, and modify new blocks.
Blockchain networks that have suffered 51% attacks in recent years include Bitcoin Cash ABC (BCHA), Bitcoin Cash (BCH), and Ethereum Classic.
2. Low Scalability
Despite the evolving nature of the blockchain technology, scalability issues are dogging major networks like bitcoin and Ethereum.
It is estimated that over 80% of blockchain projects are based on the Ethereum blockchain. The explosion of projects on the network in recent years has caused significant scalability problems. They include slow speed and high gas fees.
3. Low Interoperability
Blockchain interoperability pertains to the ability of blockchains to communicate with other blockchains. The low interoperability between blockchain is one the main hurdle within the industry. However, several parachains, sidechains and bridges are created to solve the interoperability problems.
4. High Energy Consumption
The vast carbon footprint left by high energy consumption of many proof of work systems like bitcoin has drawn the attention of various environmental regulators around the world. Bitcoin mining alone is estimated to use around 100 terawatt-hours of electricity every year. This is more than the amount of energy consumed by countries like Finland.
However, Ethereum, recently switched to proof-of-system mechanism and reducing its energy consumption by 99%.
5. Low Workforce Availability
The demand for blockchain talent has imploded by over 300% as both established firms and startups are fighting to hire top-tier talent from limited pool of availability.
Top blue-chip firms such as Google, Amazon, Goldman Sachs, the Bank of New York Mellon Corporation and DBS Group are already hiring blockchain specialists by the hundreds, and this is creating a labor shortage.
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