Various advanced technologies are involved in the background of virtual currency, which has shown rapid spread in recent years. The technology blockchain, which can be said to be the representative, has increased to be heard frequently through the media. However, many people do not fully understand how it works and its advantages and disadvantages.
Blockchain is a very important technology for the functions and services of virtual currency as a currency. This time, we focused on the disadvantages of such blockchains and the problems to be solved.
Are there any disadvantages of blockchain?
In the first place, a blockchain is a collection of multiple transactions (transaction data) called a block, and the block is stored in a chain like a chain. It is a virtual ledger that records all transactions and is also called a distributed transaction ledger.
There is no specific management agency like a bank, and it is managed by the computers of all Bitcoin users. Therefore, it is strong against system failures and any data can be stored safely. There are also other benefits, such as the efficiency of financial services and the low cost of use.
Many advantages can be obtained by using blockchain technology. It can be expected to be used in all fields, and many companies are probably considering introducing it. But even the most seemingly perfect system has its downsides.
There are many benefits, but the reality is that they are not all good things.
The enthusiasm for the promising blockchain is so great that it is even said that it will revolutionize the financial industry. Blockchain systems are highly reliable and secure. It reduces operational costs such as fees and reduces the risk of falsification and spoofing.
Blockchain has a lot of expectations, but it is not perfect. There are many benefits, but the reality is that they are not all good. Currently, development is underway to overcome the weak point, but it is not so easy to solve. This time, let’s take a look at three problems that have been pointed out as weaknesses of blockchain.
- Data problem
- Consensus speed problem
- Transaction data issue
Some fields are not suitable for the use of blockchain technology
Blockchain technology can be used for any service depending on the ingenuity. There are various subjects such as medical care, finance, and copyright. Blockchain technology is highly expected to enrich our lives. However, it is not suitable for all fields.
Do you need to do it with blockchain? In fields where governance by human beings functions sufficiently, it is considered that the benefits of introducing it are extremely low.
Disadvantages must be improved
Blockchain is now an indispensable technology when talking about virtual currency and the financial industry. In the future, it will bring great benefits to our immediate surroundings, such as bank fees and overseas remittances. But blockchain is not perfect. The weaknesses of blockchain are issues that must be improved in the future.
Disadvantages of Blockchain 1: Data Issues
One of the advantages of the blockchain distributed management system is that all transactions are managed by all users’ computers, which reduces the risk of data falsification and impersonation. Blockchain is highly regarded for its security.
However, a management system without a central authority, which is also a blockchain proprietary patent, has both advantages and disadvantages due to its nature.
Inability to handle data that needs to be deleted or modified
A centrally managed database can be modified or started over. However, that idea does not apply to blockchains that do not have a central authority. A single bug can render the blockchain worthless.
However, if we create a central organization that can handle databases, all the benefits of blockchain will be lost.
Personal information is disclosed to all users
The blockchain used for Bitcoin records all the information about how much money was sent from which address to which address and is disclosed to all users. No personally identifiable information is recorded, but you can track all of your transactions from the address.
Therefore, if the address and specific personal information are linked, the individual’s remittance record and balance will be known.
Unable to respond to requests for deletion of personal information, etc.
The Personal Information Protection Law stipulates that personal information must be edited or deleted at the request of the individual. However, blockchain cannot do this. Once recorded, personal information cannot be deleted for any reason.
In other words, blockchain is not suitable for services that need to respond to requests for the deletion of personal information.
The disadvantage of blockchain 2: Consensus speed problem
Even overseas remittances that require large fees can be settled at a low cost by using virtual currency. The use of blockchain for personal settlement and remittance is already being implemented. More and more shops accept payment with Bitcoin.
All payments are processed by the user. This raises the issue of consensus speed.
It takes time to settle an agreement
Bitcoin was said to take about 10 minutes for a transaction to be fully recorded on the blockchain. We handle a large amount of payment processing every second so that payment can be completed in an instant with a normal credit card.
Even private chains created to solve this problem are still slow compared to credit card transactions.
It is necessary to develop technology that can be processed in a short time.
This problem is also the biggest disadvantage of blockchain in fields where speed is required for consensus building. For a virtual currency to pass as a global settlement method, it is necessary to improve the speed of the agreement.
Disadvantages of Blockchain 3: Issues with Transaction Data
A blockchain that only records digital data cannot handle anything that is not digital. In other words, the use of blockchain technology is not suitable for things that cannot or are difficult to convert into data.
As it spreads around the world, it will become a huge amount of transaction data.
Blockchain is a ledger in which all transactions are recorded. All transactions are managed on all users’ computers. In other words, the more blockchain is spread around the world and the more it is used, the more transaction histories will be stored and managed. Eventually, the amount of data will grow to such an extent that it cannot be handled by computers.
It seems that increasing the block size will solve the problem, but simply increasing the capacity is not a good story. Blockchain is very difficult to scale compared to traditional databases. It has also been pointed out that the measure of expanding each time the transaction volume increases is not a fundamental solution.
As the amount of information continues to increase, the processing capacity cannot keep up.
If the use of blockchain increases and it becomes too large, there is a risk that computers will not be able to handle it. Then the blockchain will be destroyed. Blockchain is said to be difficult to fraud or falsify, but there is a possibility that the data processing capacity will be exceeded and the integrity will be lost.
Disadvantages of blockchain
Blockchain, which is attracting attention from all over the world, is a revolutionary system that cannot be found in conventional databases and is expected to play an active role in all fields. However, did you know that a system without a central authority, which is one of the characteristics of blockchain, is difficult to handle?
It has the disadvantage of being expensive and difficult to update and difficult to expand. A system managed by a central agency is overwhelmingly faster and costs less. Easy to maintain and update.
So why is blockchain so popular? Media around the world are covering the future potential of blockchain as if it were a perfect technology. Because of that, I feel that only the good points of blockchain are being focused on.
Also, I think that many people do not understand the technology properly because only the word “blockchain” stands alone. Blockchain is certainly a technology that has the potential to greatly change the future of all fields in the future. However, there are still problems to be solved to be active in our immediate surroundings.
