Mostly, blockchain networks are designed as decentralized databases functioning as the allocated digital registries. These blockchain registries store and record the information in parts ordered chronologically and interconnected with cryptographic proofs.
The blockchain technology appearance came up with multiple advantages for different industrial branches and technological fields, providing them with additional safety in unreliable external conditions. There are many more click here brought to the world with its invention. Still, its decentralized nature has some lacks. For instance, if to compare blockchain with databases that are traditionally concentrated and centralized, the blockchain has limited effectiveness and demands the capacity of storage to be increased.
Let’s discuss the most critical points shortly but in detail.
Table of Contents
Obviously, the blockchain wouldn’t be that popular and widespread without serious advantages of the technology. Here are the best of them.
Most frequently, the Blockchain data is kept on a thousand devices in the decentralized network, both the data and the system are highly resistant to tech issues and scam attacks. Each network point can replicate and store the database copy, so one device switched off won’t influence the availability or safety of the entire network.
Oppositely, many databases use one or several servers only, becoming more vulnerable to technical issues and planned cyberattacks.
Confirmed blocks will doubtfully be reversed. This means it is extremely difficult to change or delete the data after its registration in the blockchain. Due to this, it is a great solution to store financial or any other data requiring the control list, as each change is always tracked and recorded in an allocated and public registry.
For instance, businesses can use blockchain technologies to prevent possible fraud of its workers. In this case, the blockchain can provide safe and stable recording of all the financial transactions that happen inside the company. This feature will make it more difficult for the worker to hide suspicious transactions from top managers.
In the most part of payment systems, transactions can be influenced not only by two parties involved. Mediator like a bank, an emitting company or a payment provider is needed there, and they have the possibility to intrude the process. This is not needed when using the blockchain technology, as the allocated network of nods checks transactions within the process you know as mining. Due to this, blockchain systems are frequently called “trusted” ones.
That is the way for the blockchain system to deny risks caused by trusting to a particular company and lowers overall commission expenses for transactions by excluding mediators and third parties completely.
Here are the lacks of blockchain. Nothing’s perfect.
The Proof of Work consensus algorithm that protects the Bitcoin system turned to be extremely effective within many years. Still, there exist some potential attacks to conduct on a blockchain network, and the 51% attack receives the most attention of all. It may happen if one object obtains control of over 50% hashing power of the network and starts excluding or changing transaction orders on purpose.
Despite the fact that the 51% attack is possible in theory, it never became successful for the Bitcoin blockchain. The safety of the network increases along with its growth. Additionally, it is doubtfully possible for miners to invest huge sums of money to organize a Bitcoin attack, as it is much more profitable for them to get rewards for rightful and honest actions.
Additionally, a successful 51% attack will let them change last transactions only within the short time period because blocks are connected by cryptographic proofs. The replacement of old blocks will require unbelievable amounts of computing power activated. Moreover, the Bitcoin blockchain is very durable and can adapt itself quickly in response to the attack caused onto it.
Another disadvantage of blockchain systems is that it is very difficult to modify the data after you added it to the chain. Although its stability is among the best advantages, it is not always good. As a rule, data or code changing in a blockchain requires a lot of efforts put. And usually, it needs a hardfork, when one chain remains, but the other one starts being used.
The public key cryptography (the asymmetric encryption) is used in blockchains to provide users with the property rights for their part of cryptocurrencies (or any other blockchain data). Every blockchain account or address has two appropriate keys: the public key, which can be shared, and the private key, that needs to be stored secretly.
Private keys are required for users to get the access and control of their funds. Keeping this fact in mind, one can say that it acts like one’s personal bank. In case the user can’t use the private key for some reason, in fact, the money is lost and there is nothing to do with that for him or her.
All blockchains, and especially ones that use the Proof of Work, are extremely ineffective. As there is a high competition in mining and only one can win once in 10 minutes, the work performed by the other miner is lost. As miners constantly try to get more power to compute hashes, they gain more chances to find the relevant hash block, and the resources the Bitcoin network uses increased a lot during the recent decade. Nowadays, it requires more power to provide its functioning than many countries such as Denmark, Nigeria or Ireland use daily.
With time, blockchain registries may become very “heavy”. Currently, the Bitcoin blockchain needs nearly 200 GB of computer memory. The ongoing growth of blockchain sizes probably goes ahead of that of network memory storing devices. The network faces the risk to lose its nods in case the registry becomes too “big” for users to download and store it.
Despite all its lacks, the blockchain technology possesses certain unique advantages, and it definitely will stay on its ground. It will be a long way before it becomes massively used. Though, many industrial fields face pros and cons of blockchain systems nowadays. In the nearest future, big companies and world governments will probably continue experimenting with new apps to understand how to use blockchain most effectively.
It will be an interesting time, and blockchain can become even a bigger game-changer than it already is nowadays.