Though blockchain technology is touted as one of the best technologies in the World of cybersecurity, it comes with a marriage of shortcomings that are less known to many. We give you a breakdown of some of the issues you need to understand about the blockchain infrastructure.
Attracts High Investment cost
The blockchain infrastructure requires high computing power to function effectively. To approve operations on the platforms, complex algorithms are run, which consumes high computing power. An example is Bitcoin. In fact, mining and bitcoin operations are assumed to consume power equivalent to the energy used by 159 nations Worldwide in a year. To know more about bitcoin trading you can check BitQZ.app.
However, the sophisticated computational environment under which blockchain operates is highly costly. On the flip side, the energy implications can be ignored since the technology has emerged as one of the most profitable sectors in the World of crypto.
Risky due to lack of regulation
The blockchain World is a high risk since it operates in a decentralized environment that is not subjected to control. Like Bitcoin and other cryptocurrencies, they are highly volatile, making them a high-risk investment. Lack of regulation and oversight has contributed to a surge in the number of online scams hoping to dupe unsuspecting crypto enthusiasts into unscrupulous schemes where they lose money.
Whether you invest in established digital currencies like Bitcoin,Litecoin, or ether, the chances of the online wallet being hacked is always high. Additionally, authorities under the pretext that they are illegal schemes are some of the setbacks associated with a lack of regulation.
Highly complex
The blockchain infrastructure is complex, which makes it difficult for end-users to understand how it operates. Though it offers highly advanced technology, it may take a while to understand the principle of distributed ledger and data encryption associated with blockchain.
While blockchain technology aims to eliminate intermediaries in transactions, banks are touted to offer a more robust and transparent money transfer environment that’s easier to understand.
Blockchain technology is cumbersome
Besides being slow, operating on blockchain technology can be tedious. Like traditional payment systems like debit and credit cards, the blockchain environment’s encrypted, distributed, and complex nature can delay transactions.
Though perceived to aid first transactions, finalizing Bitcoin transactions can delay and at times take several hours. This can cause serious inconvenience, especially if you want to use crypto to purchase groceries or make quick purchases at a local outlet.
Did blockchain technology come into existence to resolve online payment delays? As a matter of fact, yes, but too far from the truth. The bottom line is that blockchain transactions are difficult to fast track since they aren’t controlled by a central body and may be challenging to resolve delay issues. This is opposed to transacting through banks where you can easily contact to inquire about unnecessary delays and have an issue resolved quickly.
Blockchain failure
Despite blockchain transactions being touted as cheap and fast, the blockchain ecosystem has failed to address the gaps in fast-tracking online transactions.
In fact, the cost of transactions in banks is lower since the costs are distributed to many customers reducing the high cost of transactions. This undermines the earlier perception that blockchain transactions are instant and cheap. As such, traditional currencies remain more appealing to the majority of the population around the World.
Conclusion
Though the hurdles enlisted in this article are posing a drawback in the World of crypto, blockchain technology will likely evolve in the future. Generally, just like nature, technology has ways of navigating various barriers. In that regard, the crypto ecosystem is likely to transform many sectors across the World.
With millions of users interested in the digital currency market, it’s unlikely that these hurdles may reverse strides made in the crypto ecosystem.