Important Problems About Blockchain Technology
There is no doubt that you have heard different forms of hysteria and predictions about Bitcoin and the blockchain technology. What are the major problems faced by the present day blockchain technology?
Except you have been living in Stone Age, you would not say you have not heard about a revolutionary method of payment touted to take over the traditional means of transaction. The hype and prediction about this new transaction method have been all over the place. It is crucial to talk about the current issues facing Bitcoin and other blockchains. There is a need to ask pertinent questions such as “Will the Blockchain technology be the ultimate saviour that will liberate the face of transaction”? Will it be the panacea to the entire industry problems in the society as depicted in the media? Are the present-day blockchain platforms free from the liabilities, flaws, defects, and limitations associated with the current system?
In the real world, the answer is no as the blockchain technology has its challenges.
At the moment, the blockchain technology is having challenges regarding its adoption and acceptance. It is vital for technology to conquer these problems before it can be taken seriously.
When it first came out in 2009, Bitcoin and its leading operating technology, Blockchain started the laying of a solid foundation for a new dispensation of digital peer-to-peer transactions. The Blockchain technology, with the introduction of Bitcoin, created a smooth way that dictates how web services, digital communities of the future, and the networked systems are to be constructed.
Millions of individuals across the globe have embraced Bitcoin, as well as some governments. Over the years, the cryptocurrency is widely managed, sustained, and accepted as a means of payment by a large section of the international community.
DRAWBACKS AND RESTRICTIONS OF BLOCKCHAIN
With the introduction of one detailed application of blockchain technology, a peer to peer electronic cash system that permits online payments by Bitcoin. On the other hand, the introduction of the Ethereum open software platform was meant to achieve a more comprehensive potential of blockchain technology with higher capacity than Bitcoin. This created a new world of decentralized opportunities where transactions are carried out with peace of mind and clarity.
In the last ten years, these two significant blockchains have brought significant development to the table, but unfortunately, they are yet to come up with a proven solution to the current issues faced in the industry regarding the adoption and ease of use. There are more untapped channels to uncover. To their credit, Bitcoin and Ethereum have shown us that there is a future for decentralized systems, global collaborative communities, and blockchain technology. They have been able to transform usability among an elite developer community. Regrettably, these two major blockchains have failed to make the development of blockchain technology, decentralized applications, and cryptocurrency reachable to innovators, corporations, and entrepreneurs in the world.
While we await the emergence of a new decentralized world, there is a need to have new blockchains that can overcome these pertinent issues.
1. Scalability Issues
There is no doubt about the artistic and charming nature of Bitcoin. It has an entire decentralized system where there is a need for financial transactions must entail trust, with its execution requiring no faith from any individual. Nevertheless, there is a price attached to the lack of trust; and these are the complicated limits on the number of transactions that can be done within a specified time interval.
Most of the renowned first-generation blockchain systems have placed hard limits on the number of transactions. However, Bitcoin restricts the maximum block size, and Ethereum also confines the entire amount of gas in a block. The acceptance of cryptocurrencies in recent times has significantly increased the number of users and transactions, challenging the restrictions of first-generation blockchain systems. Due to the nature of Bitcoin’s protocol and blockchain design, conventional blockchains are presently restricted in transactional output. Presently, the primary design structure of most systems is a linear linked-list style blockchain. With the increase in the adoption and the introduction of more miners, the mining capacity is devoted to mining the next block in the linear blockchain. This enhanced mining capacity does not accelerate scalability.
The issue of scalability has led to a higher transaction charge, complicated debates leading to forks and community divisions, and congested mempools. The ambitions of the Ethereum are presently inhibited by the transactions per second factor, (TPS). It must have a TPS of 45,000 for it to replace Visa; at the present TPS of 15- the emergence of a renowned application, CryptoKitties has rendered the network unfeasible.
2) Programming Issues
Blockchains have created a base programming ecosystem due to their nature as a first-generation. The introduction of blockchain-based smart contracts has brought about a new dispensation of computational law where an unbiased and universally familiar blockchain supports contracts.
For instance, Ethereum Virtual Machine was an upgrade from the limited Bitcoin programming atmosphere. The EVM has hit design limits and security flaws with the increasing acceptance. Even though Ethereum created the development facet on a blockchain technology, it has been hard to build complex applications.
3) Blockchain Security Issues
It is important to give kudos to the first-generation blockchains for their protocol layer protection. It is due to this fact that we have heard a few cases of the compromise of the Bitcoin protocol or the Ethereum protocol. This is an excellent testimony that their security is unique as these networks have been in existence for years.
Nevertheless, the application layer security has been found wanting as well. Boring application layer security has been the factor responsible for the several incidents such as the Parity Multi-Sig Wallet (a situation where 500,000 Ether was held), and the notorious DAO attack, which led to the irretrievable forking of Ethereum into two communities and blockchains. These are parts of the numerous examples that we can mention.
Smart contract security
Security has continuously been one of the most contentious themes for smart contract platforms. The security issue began with the DAO hack case ($60M), but there have been a series of cases. However, there is an agreement in the entire space that blockchain platforms can improve in this specific area. Presently, the issue of smart contract security is focused at various levels:
Code Analysers — To examine every recognized usable code patterns at development phases such as Mythril, Manticore, and Oyente.
Formal Verification — For the creation of an example of mathematical evidence to make sure a smart contract performs as expected.
Manual Validation — Making use of validation services entailing code review processes (Zeppelin) and real human beings before the launch of real projects.
These checks have proved to be deficient. There is a need to do more to confront a complicated issue of this nature, particularly bearing in mind the impact a small error or oversight can have significant financial and human expenses.
4) Usability Issues
The developer tools used presently are crude and need sophisticated third-party tools or centralized platforms to make up for the space. On the other hand, there is a need for light client implementations to target mobile platforms to drive massive deployments.
Currently, the provision of feature-rich tools for third-party developers has not been considered a matter of precedence yet. It has created an adverse effect on system security (smart contract defects) and has inhibited prevalent application; this is evident in its absence on mobile platforms.
A parallel can be drawn between blockchain technology and TCP/IP (Transmission Control Protocol/Internet Protocol) when it comes to disruptive potential and adoption at the moment. The primary reason is that blockchain technology is seen to be in its initial development stages, and most of the platforms are faced with infrastructural issues.
For example, Light Client of Ethereum has been incorporated in a tentative phase, the tools needed for secure smart contract development are in the pipeline, and the number of mobile applications collaborating with blockchains is few.
Third-party companies rose to the challenge and offered more consolidated solutions for multi-platform availability because of the absence of the required frameworks. For instance, TCP/IP development which began in 1970’s and embraced by ARPANET in 1983, has been around before the introduction of the first versions of HTML and HTTP in the early part of 1990’s.
Nevertheless, browsers are the real products that ensured the popularity of the web. For instance, we have Mosaic in 1993 and Netscape Navigator in the latter part of 1994. There is a need for the next-generation blockchain platforms to make concerted efforts to build the browser replica for blockchain technology.
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Will be continued…
