What Are The Major Limitations Of Blockchain Technology?

Are you curious about the disadvantages of blockchain technology? If that's the case, you've come to the right place!

Keep a watch on the blockchain technology sector. You'll see an increase in positive publications and news about the technology. In addition, almost every journal promotes blockchain usage among corporate clients, students, and developers.

Of course, another component of blockchain technology is not covered here. In addition, there are drawbacks to this technique, as there are to every technology.

The patterns back up this claim. As the need for blockchain expertise grows, businesses are recruiting them. This article will examine the disadvantages of blockchain technology to help you better understand it.

As you read this, you're already aware of the advantages of blockchain. It cannot get changed, is verifiable and secure, and does not depend on a centralized authority. These technologies are game changers because they may be applied to various situations and industries.

But, before we go, I'd want to provide a brief overview of blockchain to ensure we're all on the same page.

What is blockchain?

Blockchain technology have several benefits over centralized systems. Each node in the decentralized network holds its copy of the ledger under this system, and the network confirms all transactions. They use a consensus process to check the authenticity of transactions between peers in the network.

Let's say there are three pals. Everyone here has a distinct personality. While each component may operate, they need a governing body to manage transactions between them. It would help if you used a payment processor like a bank to send money to someone else.

Suppose John wishes to send money to Alice through a decentralized network. In that case, he can do so without going through any central authority. People in this town are their banks. New options emerge by removing the need for a third party to handle the transaction.

Limitations of Blockchain Technology

Blockchain technology will soon disrupt the world as we know it. Yet, we must first understand its limitations before we can appreciate its advantages. This section will go through everything in great depth.

The Difficulty of Blockchain

The complexity of blockchain is part of its attractiveness. The more persons participate in a transaction, the more use cases for blockchain there are. Many Proofs-of-Concept were first unfeasible due to the tiny number of blockchain nodes.

Furthermore, most corporations and financial institutions are adopting blockchain. Entities have taken a balanced approach, including both centralization and decentralization features. As a consequence, the level of complexity has skyrocketed. Suppose a company's present blockchain applications are small in scope. It must hire blockchain expertise.

Second, replicating a successful blockchain application in different settings is tough. The usefulness of blockchain varies depending on the use case, with insurance contracts and land records being two very other instances.

Scalability Issues

Blockchains, unlike their centralized counterparts, have limited scalability. If you've ever used Bitcoin, you're aware that network congestion impacts how fast transactions get completed. This problem receives related to the difficulty of blockchain networks to grow. In addition, the performance will suffer when more computers and other devices join the network.

Nonetheless, blockchain technology's usefulness is growing. As a result, scalability options are being incorporated into the Bitcoin network as the technology evolves. The solution is to use a separate system for financial transactions and the blockchain for data storage and retrieval.

Also, new methods for scalability issues are developing. It includes permission networks and alternative blockchain systems like Corda.

Despite advancements, these systems still cannot compete with centralised installations. Between Bitcoin and VISA transactions, there is a significant latency lag. Bitcoin's transaction speed limit is 4.6 per second. In comparison, VISA handles 1700 transactions per second. That's 150 million transactions each second, or 6 billion per day.

Finally, blockchain may not yet be ready for broad application in the real world. The technology is still far from prepared for general use in the real world.

High Input of Energy Needed

Bitcoin was the first and is now one of the most well-known uses of blockchain technology. For the Bitcoin Core, each node in the blockchain network needs around 200 GB of storage capacity. Every day, you must have at least 500 MB of download speed and 5 GB of upload speed. So it is while contemplating the enormous infrastructure improvements necessary for blockchain adoption.

The rising cost of power is one of the most critical issues confronting Bitcoin blockchain miners. As per a University of Cambridge study, Bitcoin consumes more electricity in a year than the whole country of Switzerland. The primary purpose of the energy provided is to keep the network operational at all times. Consider what would happen if we had many more blockchains.

Immutable data

The immutability of data is one of the fundamental disadvantages of blockchain technology. On the other hand, it benefits many systems, including the supply chain, the financial system, and others. When considering how networks operate, it is clear that a fair distribution of network nodes is necessary for immutability.

A blockchain network is vulnerable to control by an entity that owns 50% or more of the network's nodes.

Another disadvantage is that it cannot get deleted once recorded information. Everyone gets entitled to their personal space. But, a comparable person utilizing a blockchain-powered digital platform would be stuck with all traces of his activities even if he sought to wipe them. In other words, he has no method of deleting his digital path, destroying any residual privacy safeguards.


It's critical to remember that issues like storage, excessive energy use, scalability, and many others are transitory. Blockchain technology is still in its early stages. Other protocols have addressed or handled many of the challenges it confronts. Despite these pre-existing flows, the advantages of blockchain much outweigh the negatives.

Updated on: 13-Oct-2022

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