ADVANTAGES TO WHY WE USE A BLOCKCHAIN

Decentralization

A decentralized system is highly fault tolerant. In the event that a hub crashes on the Bitcoin systems suppose, it doesn’t cut the whole framework down. There are different hubs on the system that run the blockchain. Decentralization also adds more security since the information stored on one computer must be copied to all nodes in the network. This implies if a hub were undermined, a programmer should most likely change the data on all hubs to control the information. This has proven to be a good safeguard in deterring attacks against the system [6].

Immutability

A blockchain stores data that winds up unchanging, which means it can’t be changed once a block has been approved. This also makes it resistant to tampering and manipulation because the information is recorded on a digital public ledger stored on many nodes. To compromise it means to change that information in all the nodes on the network.

Transparency

A key feature of the blockchain that provides a benefit to business is transparency. This makes everything recorded on the blockchain censorship resistant. Information about a transaction cannot be hidden so this creates more trust and adds value to the system. Using the blockchain requires no permission from anyone, it is an open platform for all in a public environment.

Security

Since blockchain use advanced cryptographic technology and a distributed decentralized network, they offer a secure environment. Modifying data on a block requires expending plenty of compute resources. It also is not ideal because it requires changing the data on all nodes on the network. This is what deters attacks since it is more costly than mining blocks for rewards. This is a feature to help protect the blockchain from rogue miners and hackers.

THE PROBLEMS WITH BLOCKCHAIN

Energy Consumption

First and foremost, the compute resources like Bitcoin to run a blockchain expends large amounts of electricity. This is part of the protocol required to process transactions in the proof-of-work algorithm. All the energy is used by the miners in order to solve cryptographic puzzles to validate blocks. The amount of energy consumed increases with the level of difficulty increase that is related to more hashing power from compute resources. The more nodes you have mining, the greater the computational effort required to validate a block of transactions. This requires plenty of energy consumed. The whole Bitcoin network has been estimated to consume the same amount of electricity as small country like Haiti or Denmark [7]. The proof-of-work (PoW) is used to solve the problem. This algorithm is used to confirm transactions and produce new blocks to the chain. With PoW, miners compete against each other to complete transactions on the network and get rewarded.

Scalability

Blockchains do not scale well when it comes to high volume transactions. Because of the fixed block size, there are issues with expanding transaction volume. The delays also affect transaction velocity, where most blockchains cannot process more than 15 transactions per second. Scaling solutions have become the focus of many projects to optimize performance to handle more transactions and increase processing time. If claims to 1 million transactions per second are proven on the blockchain (not yet as of this writing), then that can significantly disrupt the rest of the industry.

Size

An issue with most databases, including blockchains, is their size. When they get bigger, they consume more space for storage and this makes them slow down. Bitcoin’sblockchain is already >100 GB, while Ethereum’sblockchain size has surpassed 1 ТВ (as of this writing). It’s not just a storage issue for nodes, but a network as well. With larger blockchain sizes, it takes much longer to copy them to new nodes on the network. It can take several hours to days depending on the network bandwidth. The bigger blockchain size requires more data transfer capacity to transmit to another hub. This affects new nodes or nodes that go back online and have not been updated in a long time.

High Transaction Fees

The expenses to process transactions are another issue which Bitcoin confronted. At whatever point the interest is high, exchange charges additionally go up to profit excavators. Keeping transaction charges low or evacuating transaction expenses is a test for blockchain architects. With high transaction expenses, clients are stopped from utilizing the system. When scaling issues tackle the issues with transaction speed and volume, progressively sensible charges ought to be connected.

 
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