There is no doubt that the blockchain technology holds a lot of potential.
Decentralized exchanges and asset management platforms are few of the interesting and exciting applications being explored and implemented by blockchain developers. Also, the hype revolving around blockchain is amazing and we love it.
It has helped in popularizing it within the mainstream consumers. Finally, when you say the word “Bitcoin” you don’t get blank stare from people. But, there is another side to the narrative which isn’t getting the attention. We’re talking about blockchain’s technical barriers which make them impractical for the mainstream media to use today.
You see, it’s important to see the truth and remain realistic. Living in a fairy tale where everything is possible isn’t going to cut it! Life isn’t a movie where your Prince Charming will come on his horse and save you. Today, you have to save yourself!
It’s exactly why you need step out of Disney World and accept the fact that it could be some year before completely trustless systems are ready to be used by the mainstream consumers. So, what are these technical barriers?
It’s time to shift our focus from all the new shiny ICOs to the real technological challenges standing in front of us.
The public blockchain consensus protocols have limitations. All participating nodes in the network have to process every transaction. If you’re wondering why? Remember? How blockchains are decentralized. That means one thing. No central party is involved in maintaining and securing the system.
The nodes have taken the job of the central parties. The nodes on the network are the only ones responsible for securing the system. They do this by processing every transaction and also maintain a copy of the entire state. Good lord! You must be thinking that’s a lot of information to process. We know, but just hang on! Keep reading and you’ll know what we are talking about.
Sure, decentralization offers us all the consensus mechanisms we all desperately care for. It provides political neutrality, censorship resistance and security guarantees. All of this still comes at a price of scalability. As scalability limits the number of transactions the blockchain can make.
What does that mean? In simpler terms it just means the transaction time is slow as hell. It takes time to process a block of transactions. For instance a Bitcoin block take 10 minutes. The Ethereum block takes 14 seconds. Whats worse, the it takes more time to process a block during peak hours!
Sure, the blockchain transactions are not tied to our identity, not directly at least as they appear private. Literally anyone in the world can create their own wallet remaining anonymous and transact using it.
We wish it was that simple. But, the truth is its more complicated than that!
It’s true that promises of pseudonymity are made by this technology. The transactions are recorded and stored on a public ledger. But, the transactions are linked to an account address which compromises solely of letters and number. There is no real world identity to the account address and the transaction’s originator looks impossible to hunt down.
It’s total crap! It’s all very misleading. Its true how a person can preserve their privacy as long as the fictitious name is not really linked to the individual. But, as soon as someone makes a connection the cover is blown and the secret is no longer a secret.
Since it was revealed by law enforcement agencies that they were able to identify specific users of Bitcoin during some investigations. Thus, the anonymity of the users were compromised and the promise of complete transactional invisibility by the blockchain technology broken.
Now you know why blockchain isn’t perfect!