Blockchain technology has been touted as the biggest thing to happen since the invention of the internet. The technology has potential to revolutionize different sectors, including healthcare, finance, education, mining and others. However, the adoption of this technology has been significantly slower than its proponents would wish, and there are a number of reasons to explain this slow process. We explore a few in the discussion below.
High upfront costs
The cost of establishing a blockchain system is steep to say the least, and only the most committed of institutional entities have the deep pockets to finance such an undertaking. This could explain why many entities, including banks and local governments, that could benefit massively from blockchain technology, haven’t jumped onto the bandwagon as yet.
However, some efforts are being made to resolve this issue. For example, a Chinese government-backed company is building a blockchain platform from which different entities can design their own customized applications. Such efforts could, with time, help to lower the cost of adopting blockchain technology for different use cases.
Security and trust issues
In principle, blockchain technology is said to be secure because of its decentralized nature and ability to store verifiable data on different nodes within the system. However, since this technology is still in its beginning stages, there are some vulnerabilities that have been exploited by hackers.
It should be noted that the vast majority of hacking incidents happen to exchanges, such as those used to trade different cryptocurrencies. This suggests that a lot more still needs to be done to secure the exchanges against breaches. That said, those security breaches have made many people wary of adopting this technology too soon, and it is likely that many are playing the wait-and-see game with regard to blockchain technology as it matures.
Concerns about scalability
Another factor that may be slowing the uptake of blockchain tech has to do with scalability. Blockchain systems collect huge amounts of data, and they require massive amounts of energy and storage capacity.
There are some unanswered questions about how these massive amounts of data can be collected and referenced without compromising the efficiency of the system. Take the example of a securities exchange such as the NYSE. How can the huge volume of data collected daily be stored and accessed instantly minus affecting system speed? Questions like these may be keeping some potential beneficiaries on the sidelines.
The challenges above notwithstanding, there is growing interest in blockchain technology, and as more players such as Bit Digital Inc. (NASDAQ: BTBT) enter the space, a variety of solutions and modifications will be innovated to make this technology accessible to the ordinary person on the street.
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