5 reasons why blockchain is useless outside the money ecosystem.
Despite the leitmotif claiming blockchain’s speed, it might sometimes become slow.
For the last year, we have experienced quite a few states of the Bitcoin and Ethereum blockchains when it was just 15–20 transactions per second processed. Not sure if that’s what the Satoshi was going for, so this creates quite a complexity for those who are planning to build large-scale applications because slow blockchain might result in delays and losses as it does nowadays from time to time.
Interoperability in a perspective might become an issue.
Developers call the possibility of the connection of different systems and the issues coming with it interoperability. And this is yet another thing that might cause a lot of issues in the future of the applications developed on the blockchain basis. Nowadays, when we haven’t got that many people involved in the development of dApps, we can still avoid these issues but when it will be a trend — the development of the cross-chain applications might cause some compatibility problems. This again calls for the standardization of the language and the blockchains which people of crypto are now a bit afraid of, but if the blockchain was build to be as anonymous as possible, it doesn’t mean it would stay that way.
The rising cost of mining power, the blockchain difficulty is rising.
With the average cost of electricity, it is only profitable to mine ZEC at the moment. Relatively. So, the mining business is now shifted towards the countries with low cost of electricity because mining BTC or ETH in every basement is now not as profitable as it was in 2017 or 2018. What is following the decreasing amount of mining pools and hashing power? Decreasing in speed meanwhile the difficulty of blocks is only rising. Does this cause difficulties at the moment? I would say yes, but it doesn’t have such a great impact on the users, you can always wait another few minutes to wait for your transaction to get processed, but in a perspective, if people build complicated and huge applications based on a slow network, it will result in time and money losses. Sometimes we can see this happening today with the Smart contracts based on Ethereum network.
Difficulty to update the whole system.
Another major thing that raises doubts is that blockchain itself is hard to update. That’s why we see forks happening instead of just updates rolling out. The thing is you will need to update each server keeping the history of blockchain in order for the whole network to use this update and that’s very complicated and time-consuming. No one says that there will be no resolution for such cases, but at the moment we do not have one, so those coins which are called ‘centralized’ do not have this issue, but for some reason, they are not welcomed by the cryptocurrencies society just because they are centralized. I think the centralized ones will be able to resolve issues with the dApps development faster by inventing some standards among the devs.
To be regulated or not to be?
ICO. They were booming last year and as any new thing that gets such hype and getting people involved might turn against those who participate. According to the Reddit and public forums, a lot of scamming happened during the ICOs and sometimes the huge amounts of money were lost. This brings up the question if such things should be regulated officially by the government. Some people like the idea and some people don’t, but anyway, by the end of the year 2018 the hype slowly died off. These days the IPO might take place of the ICO, at least it was checked by the years of practice and people know how it actually works.
Anyway, despite the booming of cryptoсurrency not that many countries are making steps towards the adoption of the crypto and the blockchain technologies. This question raises another one: how to regulate the blockchain? Over time, each country will have to develop its own laws, and they may contradict with each other when international relations in the blockchain area are established. Then we shall need to call the international conference to come up with the universal treaties and agreements. Like any UN convention? That might work too, but will it?
In the end it is important to say, that blockchain has great perspectives not only in the financial area, but in voting system and other fields that require as much penetration and that are protected from the external influence. Blockchain security policies would work in the government procurement too so people could keep an eye on where their tax money is going to. But still, as we all can see the technology needs a bit more time to get developed and adapted by the major companies at first before making large leaps in day-to-day usage.