3 Problems Blockchain Needs to Address
2018 is shaping up to be the year of blockchain. As cryptocurrency continues its rise in prominence and more of the finance world moves online the importance of decentralized technology will become fully recognized.
Blockchain is an amazing system and proper usage of it will radically improve so many aspects of our lives.
Although it is fantastic and a game-changer it is not yet perfected. Aspects of it need to be honed so the technology works better and its users’ needs are better met.
This week we’ll look at problems blockchain needs to address.
The first issue facing blockchain is its environmental impact.
As the world’s population increases and the minute hand on the Doomsday Clock moves closer to midnight our effect on the planet must not be forgotten. Although logic would seem that a digital currency would have a smaller global footprint, the environmental impact of blockchain can’t be ignored.
The reality is this: the computing power required to run massive global currency projects will be enormous. We are in the beginning stages of cryptocurrency and already the effects are evident. Right now, for example, Bitcoin mining requires 30.14 TWh of electricity annually and the energy needed for a single Bitcoin transaction could power a household for a month. Ethereum is also proving to be incredibly draining, using the electricity levels of a small country.
The dangers that come with widespread use of incredibly draining technology are obvious. Moving forward blockchain is going to have to take a good look at how the system uses energy and what it can do to reduce its footprint.
The second issue blockchain needs to address is its speed.
In today’s hectic 24/7 business world lack of speed is a definite hindrance. Blockchain, despite its beneficial technology, is a tortoise in the race. This is because of its chain nature, which slows down the updating process. The fact of the matter is if the new system is slower than the one it’s seeking to replace it is going to be a tough sell.
Naturally the major horses in the cryptocurrency race are looking for a viable solution. Ethereum is offering subsidies to programmers and developers looking at the issue. Other major corporations like IBM are also in on the game, knowing how important a solution is for the way technology is moving.
One promising solution is the Lightning Network, a new system that intends to speed up the payment process. User-generated channels are created and used to send transactions through the network. Although it may not be the best option for large transactions, the Lightning Network just may be an answer to blockchain’s speed problem.
With so many interested parties one can hope the solution will be put into play soon. It would be terrible if blockchain’s adoption were held back because of its speed.
It’s been said that blockchain is one of our most important inventions and is the biggest invention since the internet. That being said, it is not yet perfected.
The flaws that still exist within the blockchain technology are not minor and their very existence limit its ability to fully become the powerhouse it could be.
We want—we need—blockchain to be working at the top of its game. This technology is the backbone for so many innovations we now use in our everyday lives and we don’t want its issues to deflect from its potential.
The good news is we’re on our way.