7 Challenges With Blockchain Adoption and How to Avoid Them

In the tech industry, blockchain remains the most talked-about buzzword. These hypes originate from the ability to operate in a distributed manner with an espionage-proof system.

Every new technology, however, will always be on an upswing. Mobile app development is one of them. It takes time to get over all the obstacles and harness the power to power the future of technology. This is where the blockchain technology comes into play. Although there are many alternatives, the process of overcoming all the hurdles will take some time.

There are a variety of issues that arise when you adopt blockchain, which are felt by users and developers. How do they work? How can you handle it?

Challenges With Blockchain Adoption

Lack of Trust Between Providers

The distrust among blockchain companies is the most significant issue that hinders widespread adoption. The issue is a double one: companies may not be able to trust the security of the technology as well, and they might not trust other members of a blockchain-based network.

Each blockchain transaction is thought to be secure, private, and vetted. This is even when it is not centralized; there is no central authority that can confirm and verify transactions. The algorithms that ensure universal agreement on the status in the distributed ledger used by the entire network are crucial to any blockchain solution system. It guarantees that every new block that is created is the only possible version that the nodes of the blockchain are in agreement on. Business leaders have discovered that private blockchains without known providers have a better degree of trust.

How can we solve this problem?

Platforms such as TradeLens (a worldwide logistics system created through Maersk and IBM making use of IBM Blockchain Platform) show what can happen when competitors and peers collaborate in a bid to solve common problems to create confidence among users.

In contrast to anonymous public blockchains, those who are part of TradeLens' private blockchain are not anonymous. TradeLens private blockchain is identified in this network under the name "Trust Anchors" and has digital identities. To ensure privacy, immutability, and traceability for shipping documents, TradeLens employs a permissioned blockchain.

Scalability Issues

One of the most significant technical challenges facing blockchain technology is its technical scalability, which could be lacking the interest of users, particularly for blockchains with public access. The capability to handle thousands of transactions every second is the hallmark of the old transaction networks. Visa, for instance, can process around 2000 transactions in a second. In terms of processing speeds, the two most renowned networks of blockchain, Bitcoin and Ethereum, trail considerably in comparison. In contrast, while the Bitcoin network can execute up to seven transactions per second, Ethereum can handle up to 20 transactions in a second.

Since the nodes of the network were built to handle transactions within an environment that is governed by trustworthy parties, the limitation in scalability is not an issue with private blockchain networks.

How can we solve this problem?

There will be interesting solutions to the problem of scalability soon. For instance, the Lightning Network involves adding a second layer on top of the primary blockchain network to facilitate quicker transactions. Sharding is a different option that divides subsets into smaller network orchards, each responsible for its own list of transactions. It has the potential to expand the scope of the app when utilized alongside the proof-of-stake consensus method.

Regulatory Ambiguity and Poor Governance

Also, there is a lack of legislation that can define the basic blockchain technology, which is an important limitation to widespread usage. The regulations couldn't keep pace with the technological advances. The same is true for blockchain technology. One of the downsides (and an aspect of one of the primary goals) that blockchain technology has over the technology is that it reduces oversight.

A lot of businesses use blockchain technology for transactions. But, at present, there are no specific regulations in place. Therefore, there is no security as no one is following any specific rules regarding the blockchain. Certain areas, like the mentioned smart contracts, need regulatory support. If smart contract technology is not subject to rules, then investment and adoption in the field of blockchain will be hindered.

How can we solve this issue?

If not carefully thought through, the decentralized network could be less able to withstand events that directly impact people.

In the end, there is a compelling reason for blockchain app development companies to work within the existing regulatory frameworks rather than operating outside of them. To overcome these challenges, the government as well as other industries with strict regulations might have to consider implementing laws governing blockchain. But, this also means that regulators across all sectors should be aware of the technology as well as its impact on companies and consumers.

Interoperability is limited due to the absence of standardizing

Another problem is the absence of compatibility between the various blockchain networks. A lot of projects utilize a range of, typically standalone, blockchain-related platforms and solutions that each have their own protocol and code language, a consensus procedure, and privacy protections.

The problem is that the blockchain industry is in a "state of disorder" because of the absence of common standards to permit different networks to connect. Due to the lack of uniformity among blockchain protocols, important procedures like security are affected, which makes widespread adoption almost impossible.

How can we solve this issue?

Setting industry-wide standards that cover multiple blockchain protocols can assist businesses in working together on application development, providing proof of concepts sharing blockchain-related solutions, and making it simpler to interface and integrate existing solutions.

There are a variety of projects promising to facilitate interoperability among different blockchain networks, including Ark, which promises universal interoperability and transfer and communication across blocks. Cosmos is a different example that makes use of an Inter Blockchain Communication (IBC) protocol to enable blockchain-based economies to operate independently of silos and exchange data.

Support for Legacy Systems

Corporate organizations also have the task of integrating blockchain into their existing systems. Many companies must completely redesign their current system or devise strategies to successfully blend both technologies to adopt blockchain.

One problem is that companies don't have access to the necessary workforce of blockchain professionals to be a part of this endeavor due to a lack of qualified developers. This problem can be solved by using a third party. However, the majority of solutions on the market require an enormous amount of time and effort for the process of change.

There's also the possibility of data loss or breach, which discourages the majority of businesses from using blockchain. Every company is hesitant and cautious to alter the database it uses, and with the right reason, data corruption or loss are major risks.

What can we do to fix this?

Recently, new technologies have come out that enable older systems to be connected to the blockchain's backend. One example could be Modex Blockchain Database, a product that is designed to help users with no technical background get access to the advantages of blockchain technology while minimizing the risk of data loss.

Inadequate regulation

One of the major obstacles when it comes to using blockchain within an organization is the absence of regulations. Blockchain technology is being used as a means of transactional use by many companies. You'll notice that numerous applications will be dependent on this. However, there aren't any particular regulations regarding it currently. Therefore, no one is obligated to follow any rules regarding the blockchain.

Here's the issue, but. While one of the benefits of blockchain is the fact that it gives the ability to see what's happening, its security remains sufficient. You can't decide if it's safe for you. Industries and governments may have to create laws regarding blockchain to address these issues.

Higher energy consumption

The technology employs a proof-of-work method to validate that transactions are authentic and to establish trust before permitting them to be incorporated into the network. The system requires a significant amount of computing capacity to validate, process, and most importantly, secure the entire network through solving complex mathematical puzzles.

Ethereum's co-founder, Ethereum, has suggested a method to solve this issue through the switch from proof-of-work to proof-of-stake. This way, the participants will conserve a significant amount of time by not having to work on difficult problems.

In the Final Words

Many people continue to believe that blockchain is a part of the cryptocurrency industry. It's viewed as a shady world populated by criminals, hackers, scammers, and the like. However, technological issues like inadequacy (still slow and awkward) and insanity, scalability issues and interoperability issues, projects that stand alone, difficulty in connecting to existing systems, complexity, and the absence of knowledge about blockchain are more important.

In the beginning, before it is fully integrated into the mainstream, blockchain technology will face a range of issues. Its scalability, the amount of duration it takes to authenticate transactions, the cost of transactions, as well as security, are just a few elements to take into consideration. But there are several obstacles to overcome before we can expect significant changes in how organizations utilize blockchain technology. Businesses should keep an eye on the situation and be ready to modify their products and services, as well as receive results.

While there can be no question that blockchain technology will have a crucial role in both the private and public sectors, many people think that the future of blockchain technology is a long way off. The list of obstacles to the adoption of blockchain illustrates the need for technological advances. Blockchain is a revolutionary technology that requires substantial technological advancements. But it can change, and we will always discover a way to conquer any hurdle. Therefore, even though we cannot expect that blockchain technology will disappear at any time shortly, it will require time to fully transform the technology industry.