5 Weak Points Of Blockchain Technology
Assessing The Weak Points Of Blockchain Technology
There are many benefits to be gained from public blockchain technology for society as a whole. I am concerned that in the haze of blockchain fever, we have forgotten the benefits of our tradition systems of validation. For example, we can verify education certificates on a blockchain, but the choice of if we would want to is up for dispute. Let’s go through some of the reasons why we need a combination of centralized and decentralized validation systems.
#1 There is no customer protection on the blockchain.
Blockchain technology operates as a push-based settlement system. This means the individual holds power over the resource they want to verify on the blockchain. This could be cryptocurrency, certificate authentication, land titles, etc. The problem with this is if a transaction goes sour after it has already been verified on the blockchain, the only feasible way of returning the transaction is if the parties agree to reverse it. Using a centralized system like a bank. However, there is a procedure in place to be able to dispute trades after they are complete.
Some trade technologies that settle on a blockchain have used an arbiter system to fix this problem, an example of this is the Open Bazaar P2P trade network. This way a trade occurs between two people, and one impartial moderator. See multi-signature transaction technology for details on how this works.
#2 Settlement on a blockchain is slow.
A cost of settling a transaction on the blockchain is that all the nodes in the network need to come to an agreement that the transaction is valid. This is a far slower process than having a bank verify your transaction in an instant.
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