the Limitations of Blockchain
The current blockchain structure is not as omnipotent as we think. Although it has achieved the features of decentralization and tamper-proof through consensus, it is also a distributed system of repeated calculation and redundant storage. If we take the smart contract into account, it also includes the repeated auction feature of each transaction. Such a system is not omnipotent, and even has many limitations. Here, we only talk about the limitations of blockchain.
The first is the calculation problem caused by consensus mechanism. Let alone the highly concurrent centralized computer cluster, even a computer same as the node is also better than the blockchain in dealing with computing problems. This is because the consensus process takes up a lot of time, both computing hash and communication mean the loss of efficiency. So compared with the traditional computer system, it is completely uncompetitive to try to use blockchain to solve the conventional computing problem
Similarly, as blockchain ledgers are backed up by everyone, from the perspective of storage, this causes a huge waste of resources. Moreover, since the belief of blockchain in its early stage is that everyone can check the account books, the expectation of node storage performance is extremely low. Otherwise ordinary people can only rely on professional institutions to check the accounts.
This feature results in small block size and expensive storage, which is obvious in ETH. So some people put forward the idea of super block, but it treats only the symptoms but not the root cause. If we can not break through 100% consensus, the storage of the whole blockchain system will not have scalability.
In addition, Bitcoin and Ethereum can be understood as a completely transparent market. In this market, every transaction must participate in the whole market auction, which brings an economic problem. If the demand for some transactions is stable and sustainable, the auction will undoubtedly increase this cost, and even hinder the continuity of transactions. In other words, in such a kind of dynamic service that needs to be sustained and stable, the stronger its relevance with and dependence on time, the less suitable it is for the current architecture of blockchain.
There is another limitation of blockchain — to make the fact on chain is very difficult. The facts we understand refer to the things that happen objectively. However, in the world of blockchain, objective means consensus. Therefore, although the events happen objectively, they cannot be accepted as facts automatically by the system without consensus according to the logic of blockchain, which makes it impossible to provide more services around these events. For example, the simplest price fact is hard to pass on to the chain with a simple scheme for other contracts to call. It needs to design a verification logic that is almost equivalent to the blockchain consensus.
Many people simply see the attribute of decentralization, tamper-proof, and convenient transaction of blockchain, and wishfully hope that it can solve all trust problems. They even think it will go beyond the Internet: change everything, do everything.
We just mentioned some limitations of the current blockchain here. And from the perspective of application requirements, it may be more limited, not as omnipotent as we think. However, there is a good message that blockchain and finance are perfectly matched, and finance is the core of the modern economy. Therefore, it is an effective way to indirectly change the economic world by changing the structure of the economic core.
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