6 Reasons Why Blockchains Are Not the Future!
There is a huge buzz in the tech world about blockchain being the go-to data storage technology in the future. Everyone in the financial world is talking about it. Some people see it as extremely promising and are deeply in love with it, some people hate it as they see more cons over pros and some others are there who don’t exactly get it what it is. In this article, we highlighted the 6 most serious problems with blockchains and how these problems are stopping blockchains to become the future of data storage.
- Blockchain has huge environmental and energy costs! According to financial experts to provide security and consensus over a distributed network, blockchains rely on encryption. This means that the user cannot write to the chain or not even prove that he has permission to write to the chain without running complex algorithms which in turn require huge computing power. And all this comes at a cost so big that it cannot be ignored. Let us take the example of the Bitcoin blockchain which is one of the most valuable blockchains with a market capacity of 170 million dollars. Such a huge blockchain requires highly sophisticated and computationally intense security. It is estimated that the computing power required to run a huge network such as bitcoin requires energy equivalent to energy spent by 159 nations. Though smaller networks consume energy which is just a fraction of it, still it is an energy cost that is substantial and cannot be ignored in times like this.
- It is painfully slow! Today’s gen Z who has 5G on its way and has an attention span shorter than ever, slow blockchain computing is a reason big enough to knock it out of the race. Compared to traditional means of transactions such as the use of a debit card or service of UPI, blockchain transactions take a while to process. It is mainly due to its complex algorithms and its encrypted as well as distributed nature. It means that accepting blockchain transactions for a lunch or at any other shop can be quite a risk for the vendor.
- Blockchains create a risky environment! No matter how many people are investing in Bitcoins and other cryptocurrencies, the lack of control from any regulatory authority has created a risky and volatile environment for blockchains. It has become home to several scams and many investors are at risk of losing money. One such high-profile case which has robbed millions of dollars from its investors is Oncecoin which claimed to be as big as Bitcoin. Even if you decide to play safe and invest in safe bets like Bitcoins, Ether, and Litecoin, there is a high chance of exchange or wallet where you have kept money getting hacked, the government may shut it down based on doubt or your coins may get absconded from it.
- High complexity makes it less accessible to the masses! The entire process of writing on a blockchain and mining coins is very complicated. It needs high-level computing skills. The way coins are mined, is very difficult to be understood or practiced by a layman. It needs to be simplified exponentially to make it accessible to the masses. However, that simplification can compromise the security that it has got to offer. It is a big problem that advanced engineering and computational technology have to deal with.
- It has earned a bad name for itself! The USP of a blockchain is its security as it is known for carrying irreversible transactions. Nodes of any blockchain cannot be edited or reversed. Like any other good technology, it has also fallen into mischievous hands and is used for various illegal activities such as drug dealing, black marketing, and terrorism. Though the legitimacy of these associations has not been proven yet, they still it has earned a bad name because of it.
- Better technology is available! As compared to blockchains better technology is available for data storage. With the development of advanced engineering and computational skills, we can expect the emergence of much more advanced technologies in the time to come. One such option better than blockchain is sharding. This huge data is divided into small parts called shards. Since data is distributed in small segments, its computing is easier, faster, and cheaper. To take security one notch up there is a process called secret key sharding. In this process, the crypto key is broken into small shards and distributed among various stakeholders. One stakeholder will get access to the crypto coins only when all the parties are present and agree to give their key for access.
Though blockchains are a technology that is here to stay, the chances of it becoming the prevailing technology of the future for data storage are quite less.