Blockchain is one of the hottest buzzwords in the finance and technology sectors.
The technology can potentially revolutionize financial services.
Unfortunately, there are still challenges that are keeping from widespread adoption. In fact, Deloitte outlines five key hurdles.
Challenge No. 1 — Increased Performance
“Blockchain can be slow,” said Deloitte researchers in their report, “In contrast to some legacy transaction processing systems able to process tens of thousands of transactions per second, the Bitcoin blockchain can handle only three to seven transactions per second; the corresponding figure for Ethereum blockchain is as low as 15 transactions per second.”
“Because of its relatively poor performance, many observers do not consider this technology to be viable for large-scale applications.”
Challenge No. 2 — Interoperability of Blockchain Technology
With an increasing number of players, experts worry that with so many different networks, no standard exists to allow them to interact with each other, says CNBC. In fact, this standardization is what the industry calls interoperability. According to Deloitte, the lack of interoperability “grants blockchain coders and developers freedom — and can give IT departments headaches as they discover that platforms can’t communicate without translation help.”
Challenge No. 3 — Reduced complexity, cost
One of the common criticisms of this technology is the intensive computing power and electricity consumption it requires.
According to the study, “New cloud offerings have been coming to market at an accelerating pace and have the potential to lower the barriers to developing and operating blockchain networks.”
Challenge No. 4 — Supportive regulation
ICOs are subjected to scrutiny in a number of countries. ICOs involve companies selling their digital tokens in exchange for cash or other cryptos.
However, there are areas where the regulations are unclear such as smart contracts. Deloitte indicated that there is progress regarding the matter.
Challenge No. 5 — Needs More Collaboration
Deloitte emphasized the necessity for more collaboration between firms that are active in the sector.
“As a technology that facilitates transactions across a network, the value of a blockchain network increases with the number of users,” the report said.
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