Blockchain Issues and it’s limitations.


Blockchain as good and nice as it might sound has it’s own limitations and it’s also an inappropriate solution to certain kinds of problems.

If you are really new to blockchain and don’t really understand what the technology is all about you can checkout our article on it here.

Just a quick brief on it Blockchain is a distributed ledger technology which improves on the centralized-based solutions in different ways. It consists of peers connected in a distributed network where each peer has a copy of the ledger. To validate the transactions between those peers, the network utilizes a consensus algorithm.

Disadvantages of Blockchain.

It’s almost not scalable.

Blockchains are not scalable as their counterpart centralized system. If you have used the Bitcoin network, then you would know that the transactions are completed depending on the network congestion. This problem is related to scalability issues with blockchain networks. In simple words, the more people or nodes join the network, the chances of slowing down is more!

However, there has been an increasing change in how blockchain technology works. With the right evolution of the technology, scalability options are being integrated with the Bitcoin network as well. The solution is to do transactions off-blockchain and only use blockchain to store and access information.

Other than that, there are also new ways of solving scalability, including permissioned networks or using a different architectural blockchain solution such as Corda.

High Energy Consumption.

Blockchain technology got introduced with Bitcoin. It uses the Proof-of-Work consensus algorithm that relied on the miners to do the hard work. The miners are incentivized to solve complex mathematical problems. The high energy consumption is what makes these complex mathematical problems not so ideal for the real-world.

Every time the ledger is updated with a new transaction, the miners need to solve the problems which means spending a lot of energy. However, not all blockchain solutions work in the same manner. There are other consensus algorithms that have solved the problem. For example, permissioned or private networks do not have these problems as the number of nodes within the network is limited. Also, as there is no need for global consensus, they use efficient consensus methods to reach consensus.

Immutability of Data.

Data immutability has always been one of the biggest disadvantages of the blockchain. It is clear that multiple systems benefit from it including supply chain, financial systems, and so on. However, if you take how networks work, you should understand that this immutability can only be present if the network nodes are distributed fairly.

What I mean to say is that a blockchain network can be controlled by an entity if he owns 50% or more of the nodes — making it vulnerable.

Another problem that it suffers from is the data once written cannot be removed. Every person on the earth has the right to privacy. However, if the same person utilizes a digital platform that runs on blockchain technology, then he will be unable to remove its trace from the system when he doesn’t want it there. In simple words, there is no way, he can remove his trace, this making his privacy right a myth.


Blockchain technology is more secure than other platforms. However, this doesn’t mean that it is not completely secure. There are different ways the blockchain network can be compromised. Let’s go through them below one by one to make more sense out of it.

  1. 51% attack: In the 51% attack, if an entity can control 51% or more of the network nodes, then it can result in control of the network. By doing so, they can modify the data in the ledger and also do double-spending. This is possible on networks where the control of miners or nodes are possible. This means that private networks are more likely to be safe from 51% attacks, whereas public ones are more vulnerable to this.
  2. Double-spending: Double-spending is yet another problem with the current blockchain technology. To prevent double-spending the blockchain network deploys different consensus algorithms including Proof-of-Stake, Proof-of-Work, and so on. Double spending is only possible on networks with a vulnerability to the 51% attack.
  3. DDoS’s attack: In a DDoS attack, the nodes are bombarded with similar requests, congesting the network and bringing it down.

Privatekeys and user reliance.

To make blockchain decentralized, it is important to give individuals the ability to act as their own bank. However, this also leads to another problem.

To access the assets or the information stored by the user in the blockchain, they need private keys. It is generated during the wallet creation process, and it is the responsibility of the user to take proper note of it. They also need to make sure that they do not share it with anyone else because if they do so, their wallet is in danger. Also, if they lose the private key, they will lose access to the wallet forever. The reliance on users makes it as one of the disadvantages of blockchain.

So, if you as a user who forgets its private key, are eventually logged out of their wallet and no one can get it back. This is a serious drawback as not all users are tech-savvy and have more chances to make mistakes. If there is a centralized authority that takes care of it, then it defeats the purpose of decentralization.

It’s really hard to implement and very expensive.

Implementing and managing a blockchain project is hard. It requires thorough knowledge from the business to go through the whole process.

They need to hire multiple experts in the blockchain field that leads to the problem and hence it is counted as one of the disadvantages of blockchain.

Not only that they also need to train their existing professionals on how to utilize blockchain and then ensure that the management team can understand the complexities and outcomes of a blockchain-powered business.

This way, they can understand their requirements and help transform their business processes to utilize blockchain.

Not to mention, if you find blockchain developers and specialists, they are harder to find and will cost more compared to traditional developers due to their demand and supply ratio.