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Disadvantages of Blockchain Technology. Is It Possible to Solve Them All?


Denis Goncharenko

Since the invention of first consensus algorithms and blockchains altogether there have been many advancements, but we are still at a very early stage of decentralized technology and face many serious drawbacks that may be deal-breakers moving towards mass adoption.

We went into research with a target in mind to learn how far we are in finding a solution for the problems we have. In this article, we’re going to be counting down the top 10 main concerning aspects of blockchain technology and examining the ideas and solutions for them. We take one of the newest blockchain projects called Libonomy to check how they cope with the drawbacks, and what kind of solutions are being created for this or that issue.

Speed

There is usually a big disparity between what’s promised and what’s actually true. Both earlier and newer projects tend to provide the highest, theoretical speed of the network, but in reality, it turns out that the transaction rate is still too slow for day-to-day activities. We can find similarities with most common centralized technology comparison – VISA, that theoretically could handle as much as 54 000 transactions per second (TPS), but in real life rarely exceeds 1700.

Mostly everyone is aware of the difference between theoretical and practical, but the marketing aspect still proceeds to have a louder voice. For example, Libonomy has acknowledged this and promises a robust network with an actual throughput starting at 6000 TPS.
  

Hard to scale

14-10-2020 15:29:05  |   Investments
The busier the network the slower it usually is — scalability has been an issue for all the earlier blockchains, mass adoption using them right now wouldn’t even be possible. Thanks to the artificial intelligence engine, the network can be highly sophisticated in distributing resources during high activity and with a wide variety of nodes.

Inefficient

The most popular blockchain – Bitcoin — is built on a Proof-of-work algorithm, requiring a lot of energy. Over the years there have been many ideas presented to fix the inefficient algorithm but most of them fail to solve the problem without introducing another flaw. Since then, other algorithms have been introduced to the market. Aphelion is a consensus algorithm used by Libonomy that doesn’t introduce flaws, but utilizes node computing power to run the network efficiently instead of forcing them to compete against one another for a reward.

High cost

Nowadays, both the private and public sector face the problem of distributed networks being quite expensive. While the public sector faces the issue of high fees, the private sector has other difficulties — they need to hire developers, form and manage specific teams, purchase licenses as well as set up maintenance teams and in some cases even other concerns.

Not interoperable

Perhaps one of the most crucial drawbacks of blockchain technology is the lack of interoperability. There are many different blockchains and many different ways in how they reach consensus within their ecosystems, that introduces a problem where two different blockchains due to their different algorithms cannot communicate with one another.

The Libonomy project has solved the interoperability problem. To explain in more depth, Libonomy can serve as a bridge to not just interlink different blockchains within their tight ecosystem, but all public and private blockchains.

Leading towards centralized and unfair network

Proof-of-work (POW), proof-of-stake (POS) and delegated proof-of-stake (DPOS) are the most popular consensus algorithms used in public blockchains, but none of them are ideal in sustaining a completely decentralized and fair network. Most networks struggle to provide more decentralization — Aphelion consensus rewards nodes based on their quality and contribution to the network.

All data is immutable

One of the most essential aspects of blockchain technology is the data immutability – once written, it can’t be altered. It’s great for the data itself, but in case blockchain’s protocol needs to be radically updated, it causes a hard fork. Hard forks usually divide the community and introduce an unnecessary volatility to the cryptocurrency. Well known hard forks are Bitcoin Cash and Ethereum. The best idea for a network is to issue dynamic, fork-less updates whenever deemed necessary by the AI engine.

Blockchain’s size

Blockchain powering the most popular cryptocurrency Bitcoin just surpassed the 300 GB mark, and archive nodes on Ethereum are on track to hit 5000 GB by the end of 2020. Nevertheless, there are multiple projects that utilize database sharding algorithms to lower the blockchain’s size for a single node.

Security issues

51% attack, double spending, DDoS and other vulnerabilities as well as poorly audited smart contracts are all concerns for security of blockchain and utilities offered by it. Multi-pool architecture and constant node shifting renders all security threats impossible — such solutions are implemented on Libonomy blockchain already.

Complex

Many have been already introduced, but we are still lacking simple tools for end users and versatility for developers to push blockchain towards mass adoption. Right now, developers need to have a very specific set of skills and knowledge to just get into the door of blockchain and decentralized application (DAPP) development.
If we take a closer look at Libonomy's roadmap, their primary aim is introducing easy-to-use tools for end users to simplify their experience while at the same time not sacrificing the fundamental ideas of blockchain technology. And on the other side, they are introducing tools like multilingual software development kit (SDK) and on-platform smart contract debugging for developers.

Honorable mention: Not mature

This is an issue all blockchains still face – the blockchain industry is still at a very early stage. Perhaps, with the improvements that the Libonomy team has been able to push forward with their blockchain, we’ll be able to realize many new use cases and ultimately speed up the mass adoption.

Conclusion

We might not be in the process of inventing the wheel any longer, but we undoubtedly are still improving it. Many enterprises as well as society altogether is still hesitant towards blockchain technology, we can’t predict which technology will be the one that will cause a rapid mass acceptance for blockchain, or even if there will be one, however, projects like Libonomy with its ideology for equality on the network, autonomous nature and strong technical foundation sure makes a great case for itself.

Image by Bitcoinist

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