What are the limitations of blockchain?

The major limitations of blockchain are:

Lack of Technical Talent

Today, there are a lot of developers available who can do a lot of different things in every field. But in the blockchain technology, there are not so many developers available who have specialized expertise in blockchain technology. Hence, the lack of developers is a hindrance to developing anything on the blockchain.

Network Size

Blockchains require a vast network of users. Therefore it is not much resistant to the wrong action as well as it responds to attacks and grows stronger. The blockchain is a robust network with a widely distributed grid of nodes, which makes it more difficult to reap the full benefit.

Security Flaw

Bitcoin and other blockchains are associated with one considerable security flaw known as a “51% attack.” This security flaw refers to a situation when a group of “miners” takes control of more than half of the blockchain network’s computing power. If the miners somehow acquire sufficient computational power, then there is no centralized authority to prevent them from influencing the entire Bitcoin network. It means the attacker can block new transactions from taking place or being confirmed. They are also able to reverse the transactions that have already validated during that same period. Due to this, they could spend coins twice.

For this reason, Bitcoin mining pools are closely monitored by the community who ensure that no one gains such network influence.

Speed and cost of transactions

The first few years of the existence of blockchain, transactions cost are “nearly free.” But as the network grows, it will NOT be the most cost-effective option of transferring money due to rising transaction costs in the network. From the end of 2016, it processes only seven transactions per second, and each transaction costs around 0.20$.

Consensus Mechanism

In the blockchain, we know that a block can be created in every 10 minutes. It is because every transaction made must ensure that every block in the blockchain network must reach a common consensus. Depending on the network size and the number of blocks or nodes involved in a blockchain, the back-and-forth communications involved to attain a consensus can consume a considerable amount of time and resources.