Blockchain as an invention pushing multiple innovations is still carrying many shortcomings which require improvement. Every technology invented or innovated has taken its own time to reach a stage where it is usable and known to every man in this world. Technologies can take up to 30 years of multiple developments and innovations which render them more usable and accessible for the people. The Blockchain is no less, as Oxford Philosopher Nick Bostrom has stated – “We are like small children playing with a Bomb“
Here we gather multiple opinions from the Humans of Blockchain ™ and their views on the shortcomings in the Blockchain Industry.
*These opinions do not necessarily represent the views of Humans of Blockchain
“ There were a number of “hard questions” related to blockchains that are being tacked by enterprise platforms – identity, interoperability, scalability, permissions, upgradeability, and so on. Transaction throughput is a good example – recently Accenture and the DTCC tested Corda and found it could handle 6,300 trades per second. This compares well with the 3 or 4 per second that Bitcoin’s public network can handle. “
“ Some challenges faced by the blockchain technology are scaling, conflicting developer community and slow open-source development, as well as misinformation – due to a large amount of money at stake – and FUD sentiments that easily thrive among the public. In addition to those, if blockchain verification is running slow, laws and regulations are even slower. There are a few other challenges, like mining centralization of public blockchains, and some limitations on the hardware side, too, such as few blockchains becoming so big that running a full node is not possible of everyone. There is a lot more to discuss on this topic. Overall, blockchain systems work best as a final archive and store of data that is designed to be irreversible and useful reference over time. In my opinion, the best future use cases for blockchain will capitalize on its strengths and use its weaknesses/ limitations as opportunities to explore development opportunities with complementary technologies, which might be the fastest way to solve such challenging issues. “
“ I see big war now between ‘Regulation vs Decentralization‘. Nowadays all crypto world was divided into two sides, some for full regulation of the market, others ask to hold to the government hands off and against any regulation.
Pros: It will allow bringing order to this industry, will increase the responsibility, will attract more traditional investors, will reduce the number of scammers.
Cons: It will destroy the idea of a blockchain, a decentralization and will return everything to an old financial system with a total control where the small group of bankers operates everything, and politicians perform function as puppets. There will be no independence, anonymity, and justice.
Pros: full independence, freedom, fast development of technologies, the world without borders, elimination of all intermediaries, leaving from an old financial system, an opportunity not to submit to anybody, an opportunity to become full and rich is absolute in any country, without restrictions.
Cons: Swindlers use it actively and because of it many people lost a lot of money and do not trust projects, cryptocurrencies and in general blockchain any more. Which side are you on? It’s only your choice. “
” Really, when we talk about the shortcomings in the blockchain space, there are not any shortcomings per se. It is an emerging field, we touched upon this briefly, people these days are very impatient. The wonderful thing about transformation called blockchain is that it is the first time in human history that digital transformation has been social.
So, when the internet was rolled out in the early 90s, we couldn’t do anything about it. There was no social media. When the Dotcom bubble happened in 2001 again there was no social media. We couldn’t be part of this conversation when the smartphones came out when the cloud was deployed. The normal everyday person couldn’t be engaged in this process of thinking through and iterating about this new technology.
But, with blockchain, each of us can get on Twitter, WhatsApp, Instagram, WeChat, Telegram etc. and talk about blockchain and how would we use it in the iteration of this chapter of digital transformation.
Blockchain is transformative because for the first time it is a global social conversation that can be had. So, I’m not really worried about the pace of blockchain or is there any shortcomings, we’re discovering blockchain as an ecosystem at a record pace that we’ve never been able to do before in human history. “
“ First of all, security. We’ve seen so many scams in the last year. We also need to be very careful in the use of our data. The blockchain is a transparent and permanent record, so anything you upload to it will stay there indefinitely and is accessible to the public. Access to that data needs managing carefully, perhaps via the use of a private blockchain with limited access.
Another shortcoming is the lack of regulation. If we had better regulation, all participants would understand their own rights and responsibilities. “
” When the price of Cryptocurrencies increased tremendously last year, the regulators were rapidly disturbed about the experimental nature of the market. Though there are other sectors in the Blockchain where the regulation is being doubted such as smart contracts, nevertheless, the regulations in existence do not include smart contracts, and this could affect Blockchain investments.
But, progress is being made regarding the regulation as some states have approved bills linked to the approval of blockchain and another group will look into the Cryptocurrency issue. “
“ Security’s the biggest issue we are facing and Exchanges are the second problem. As long as we keep on losing money over exchanges, wallets and ICO, we’ll not spot any new investors in this market. “
” I can’t speak for the entire blockchain industry as a whole as I only have limited visibility. I see a lot of heated “debates” between blockchain KOLs about things that are highly theoretical. I think the focus should be on what problem you are trying to solve in your industry. I think the ‘crypto winter’ has really reflected what’s lacking in the industry – building something that users want to use and creating actual fundamental value in those products. “
“ This sphere is still at its infancy stage. Therefore it is quite normal to find it full of challenges both technical, business and regulatory
From the tech side, the biggest challenges are scalability, interoperability and energy consumption
From the business side, regulation is #1 barrier. No one business wants to invest millions of USD on a project which will eventually be deemed illegal or unregulated. Other than regulations, adoption is one of the major barriers for businesses to shift to blockchain\crypto
Despite the challenges, most of the projects are work-in-progress resolving the issues. BTC, for example, has already implemented Lightning Network which improved the processing speed noticeably and the development team is still working on other solutions to make the infrastructure even more scalable and much faster.
Ethereum, on the other hand, is tackling the high energy consumption by shifting from PoW to PoS
All in all, we are still at a very early stage of this new innovative technology and it will take another year or two for this sphere to overcome the main barriers. “
” I think everyone has talked this to death but Scaling Ethereum is the biggest thing hanging over everyone’s heads. Right now, it’s not that big of an issue as the Network has not reached that much amount of transactions where anything is going wrong but I think that if we get major adoption, then we will need a platform (Blockchain) that can scale and support the number of transactions. There are creative solutions such as Sharding, Side Chains and all sorts of options but we’ll see what happens. I am pretty confident that Scaling will occur before full-scale adoption happens, that way they are proceeding hand-in-hand. “
“ Blockchain technology has already spread its roots in various industries and domains including asset management, retail, monetary-use cases, digital currencies, e-contracts, decentralized exchanges, and more. The majority of blockchain use cases are related to banking and financial services and are related to data management and data verification.
In large part, this is due to Bitcoin and other cryptocurrencies, which have showcased the blockchain to the rest of the world. In my opinion, one limit is represented proper by the low number of use cases in other sectors that could bring cryptocurrencies in the everyday life, but it’s only a matter of time this concern will be addressed. “
” Scammers. The scammers have done and keep doing big damage to the image of the industry. The lack of regulations and the greed and irresponsibility of some people have caused that scammers to invade the crypto community.
The KYC and AML processes, more maturity of investors, the professionalization of the industry and the regulations will help overcome most of the scams. People need security and confidence in the system if a new technology has to be adopted. “
” Obviously, the lack of regulated players in the market is a shortcoming which needs addressing, and at SEBA we are busy building this bridge. Another significant shortcoming is the lack of institutional grade custody storage.
The irony in the crypto economy is that private keys that grant access to digital assets need to be physically protected if they are to be stored as securely as possible. And that’s not the case with fiat money. Fiat money is primarily digital, a very small portion of the money floating around the world is actually physical. The safest way to protect digital asset private keys is if they never ever touch the Internet. They need to be generated offline and remain offline until such time as they are needed to sign a transaction.
So having secure physical storage capabilities is paramount to building institutional confidence in the crypto markets. At SEBA, we are addressing this shortcoming with our deep cold storage solution. You’ll be able to read more about our offering as we approach launching the bank a little later this year. “
“ Similar to the political and status quo hindrances, we need to keep talking to remove the FUD out there. There are lots of really smart people working in this sector and they are improving the base technology all the time. Again just hang in there! “
” Real use cases! We need more real use cases! All these technologies and protocols all these projects are talking about, the majority of people do not understand what they are really for. We need more real use cases because that is when a relationship is formed.
If I can say this project does X and this X means Y to me then you have created a scenario where your technology development becomes something of value to real people and when this occurs, your project becomes valuable and sustainable. “
“ Market-related marketing/legal/blockchain service/conference fees – the moment someone here service is blockchain related they tend to add another zero to the price.
Competitive pricing platforms like Mobu will solve that with public ratings from users – it will ensure better quality and lower pricing. Also, the burn rate of most ICO’s is too high. You don’t need to visit 20 countries a year to market your product, you can start off with online marketing etc until you scale the business. “
“ There is oftentimes a lack of focus. For example, for projects to really solve problems they need to better understand their specific industry and work on solutions and buy-in from the companies and experts in those industries. However, it has been more common for these projects to only attend blockchain conferences, where there are rarely industry-specific experts or companies. “
“ The main shortcoming of the blockchain market is an over-abundance of scammy/poor projects. Since ICOs are crowdfunded, people need to do their research. However, since most investors are new to this and the blockchain space itself is unique, many people either don’t do their research well or they listen to others.
This results in a lot of the investor horror stories we hear of and is a significant contributor to the massively impactful 2018 bear market.
To overcome this, we probably need more regulation in the blockchain space which will be coming with the rise of security token offerings. “
“ It depends on the country, some countries are quite ahead like Dubai has a land registry on the blockchain, Estonia is working on it. And there are some countries that are doing it and nobody knows they are doing it. Some projects are quite sensitive. We’re helping some of the nations, talking with them to protect their infrastructure with our solution.
I am actually a bit disappointed at the moment where we are with blockchain. We should have been further ahead because there are not many operational blockchains. There’s Hyperledger from IBM and it’s a private blockchain and some people don’t even call it a blockchain.
I’m disappointed because none of the most spoken blockchains are truly operational. So when I speak with government and top 500 companies they tell me “what can we do with something that’s not operational. So IBM approaches and says we want to do something and hence we go with IBM. They provide us SLAs, they provide everything required from an operational point of view. Tell me which blockchain company provides SLAs? There’s none.”
And that’s what is disappointing that these projects have got a lot of funding but they are still not operational. Some are creating an ecosystem of dapps and they have been very slow. IBM saw the opportunity and their ecosystem of dapps is pretty comprehensive. I’m quite disappointed in term of the evolution of blockchain infrastructures. “
” Honestly, I do not see too many gaps, considering it’s a newborn world. There are advisors that says they are experts but do not know the subject at all; there are people that launch ICOs only for the purpose of scam non-expert investors, but it’s normal, at the beginning are things that happen in all the commercial sectors. I think these obstacles can only be overcome with the passage of time. “
“ There are still too many people looking at crypto as a way of getting rich quick. They are taking investors money and never returning it, either through incompetence or more malicious intents they are damaging the industry.’ ‘In addition to that, I feel many people think the industry is further forward than it actually is. We still have a long way to go before blockchain products become embedded across the dozens of different sectors we are seeing use cases for. Critics need to stop considering it a failure and give it time to mature. “
” The space needs more transparency, which can be done via regulations.
We must popularize the technology. People should not be afraid of blockchain and cryptocurrencies. “
“ If technology architecture were a vehicle, I’d choose Mercedes Benz. The trick is not to reinvent the wheel. Just quality engineering to make the car a pleasure to drive with the customer in mind, not necessarily go faster, and definitely not louder. Make music, not white noise. “