Even though blockchain technology has the capability to improve so much in our society, there are some problems that come with it.
One problem with blockchain technology is scalability.
As we know, the blockchain network holds every transaction ever recorded from the very first block; nodes store the data. Each transaction that is made grows the amount of information on the ledger. This growth of information causes the system to become more inefficient.
When a new block is created, the node must confirm the transaction and relay that information to every node on the network. This can also use a lot of the network resources because of how much information must be recorded and stored.
Scaling with Bitcoin and Ethereum can especially be difficult because of how popular they already are. Wanting to scale them can nodes to request higher transaction fees to process the information.
The second problem with blockchain technology is energy consumption.
The proof-of-work system that determines the winning node for the next block can be very energy-intensive. Bitcoin and Ethereum both use this system. "As the network grows, the number of competitors increases, and there's a fight for more computer power, which consumes energy. The energy consumption is extremely inefficient because ultimately just one node will win the right to confirm the next block," explains The Motley Fool .
It is also researched that the actual code required to make this type of system is very complex and comes with the possibility of more bugs.
Another problem with this technology is the speed.
According to The Motley Fool, because of the decentralized nature of blockchain, it is not a great everyday tool to use.
When using a debit or credit card, it is almost guaranteed within seconds that the money will be transferred when making a transaction. Banks are very trusted sources of funds; this makes the merchants confident that the transaction is verified and will come through.
But when looking at blockchain transactions, they can take up to an hour to verify a transaction. It has to be confirmed on the blockchain first before the actual transaction can occur. Because the blockchain can only handle a certain number of transactions at a time, it can take a while.
This is definitely a reason why using blockchain for store transactions is not the best idea as of now.
Hive has 3-second block validation.