The third and final instalment of our series on Blockchain basics takes an overview of the challenges associated with the technology, and its applications beyond cryptocurrency.
Challenges Associated With Blockchain:
Still a relatively new technology, Blockchain does encounter certain challenges.
Scalability is one, because as Blockchain networks’ size and complexity increase with its growth so too does the need to process transaction loads to meet the ever-increasing demand. Various solutions have been developed such as on- and off-chain solutions, scalable consensus solutions and hybrid options.
Energy consumption for proof-of-work systems is another challenge, where network design solutions are constantly being worked on.
And regulatory uncertainty is a further concern. New regulations relating to specific areas of Blockchain usage - such as crypto regulatory frameworks - are always being developed by authorities.
Applications Beyond Cryptocurrency:
There are many other areas in which Blockchain is being successfully applied.
Supply chain management is one, with verification of products, adherence to compliance regulations, and tracking some of the key areas being impacted by the tech.
Blockchain is also regularly championed as a decentralized method for online voting, and in a similarly data-sensitive field it is also already being used for the management of healthcare records and digital identity verification.
Blockchain is also having huge impacts in smart contracts, as it ensures security, automation, risk reduction and efficiency at the various steps of the execution process.
The descriptions provided above are all based on publicly available information, and cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include Investopedia. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.