Eleven years have passed since Satoshi Nakamoto presented to the world his marvelous invention, the Bitcoin. Even though a lot has happened during this century in the world of cryptocurrencies and blockchains, the technologies have yet to enter the mainstream.
For sure, almost everyone has heard about Bitcoin, some more than others, but not a lot of people around the world are familiar with the concept of blockchain, what it is, what it stands for, how it works, and how amazing it is. For instance, it can disrupt almost all industries and improve the way we live.
Needless to say, it requires a lot of time for blockchain technology to reach mass adoption. In this article, we will touch upon some of the most important challenges this technology must overcome in order to reach the mainstream.
We’ll start with probably the most important challenge: the public perception of blockchain technology. Without a doubt, as mentioned above, the large majority of the public is oblivious to the existence of blockchain. Of course, blockchain technology is something so complex (and potentially unappealing to the public), that it is really difficult to be marketed to the mainstream population.
Sadly, for most people, blockchain technology is basically the same as Bitcoin, which is a very common misconception, as one is a peer-to-peer, decentralized payment system, and the other is a technology with so much potential that it boggles even the brightest minds of our generation. In short, we still need a few more years until people will accept the concept of digital currency, and will potentially understand the limitations of the typical fiat currencies we are using today.
Since we are on the subject, there’s also the fact that cryptocurrencies have sort of gotten a very bad reputation during the last couple of years. The anonymous features of the blockchain have attracted a lot of criminal organizations. These cryptocurrencies are now the primary source of payment on the Dark Web, where privacy-oriented cryptos, such as Monero and Zcash, are among the favorites. Not only this, but there has been an excessive number of hacks and scams in the sphere over the last couple of years. From exchange hacks, lawsuits, to an impressive number of fake ICOs. All of these aspects contribute towards associating the blockchain tech with criminal activities, which is, by all accounts, very wrong.
Lack of regulation
Sure, a large majority of all the crypto news of 2017 and 2018 imply something about the regulation of cryptocurrencies in various places around the globe, but the truth of the matter is that the crypto space is still very much unregulated. This has made people afraid of using cryptocurrencies because they might lose their investments, since there’s no party that can be held accountable in case something goes wrong.
This is also one of the reasons why various big institutions and governments are reluctant to accept cryptocurrencies, as creating these types of frameworks is a very tedious and expensive process, one that can have various unwanted effects. In short, despite all the benefits that blockchain technology provides, there’s still no “security” in the traditional sense of the word.
Image source: Intellectsoft
Blockchains can be slow
Let’s get one thing from the start: this is not a general rule for all crypto projects, especially ones that have dedicated a lot of resources and time towards achieving really fast payment platforms. However, since blockchains are complex (despite various claims of being faster than traditional payment methods), in various cases, they can’t really deliver.
The good news is that blockchains heavily rely on the internet to function, which means that there’s a good chance we will see a lot of developments and infrastructure upgrades during the following years.
Questionable scalability potential
Bitcoin, as a concept, is pretty much perfect. At least on paper, it worked well, and for the better part of its life, it is delivered just as promised on most fronts. However, people soon started to realize that Bitcoin (and many other projects, to be fair) has a major scalability problem. Of course, during the years, various technical solutions have been proposed and some have even been implemented.
The fact that most blockchains are not designed from the ground up with scalability in mind means that, as the number of users increases on the network, the transactions start to take longer, and, as a result, the costs will also increase. Some of the blockchain projects that are currently at the forefront of innovation in this regard are Zilliqa, Plasma, EOS, and QuarkChain.
High energy consumption
Energy consumption is another very important challenge that blockchain technology needs to hurdle over if it wants to achieve mass adoption. It’s almost common knowledge that crypto mining requires staggering amounts of energy. Inevitably, this makes the whole blockchain affair to seem very unappealing for environmentally conscious institutions, governments, and people.
It’s quite clear that our society is slowly starting to accept the dangers of over-consumption, and blockchains just had the bad luck to appear at the worst possible time, a time where we have hurricanes and all sorts of monster weather events because of our lack of respect for mother nature. As one can imagine, when the annual energy consumption for running a crypto network is similar to that of a country, that’s a very big problem. In the long run, things will get better as the world will adopt more and more renewable energy technologies. However, in the short run, blockchain developers will have to keep thinking of unique ways to reduce the power blockchains need. There’s no getting around it.
Image source: Greentech Media
Of course, these are just the most general challenges for blockchain technology. Ultimately, we, humans, need time to adjust; as history clearly states, we are sort of resistant to change (even though one might argue that this is not true, because of our evolution patterns).
Nonetheless, one thing is clear: blockchain technology is still in its teens, it’s not mature yet, and it will have a lot of flaws during its development. With time, things will change, our perception will change, and the technology will evolve with it.
Featured image : Coinpedia