The blockchain which is also termed as Distributed ledger technology is an unarguable ingenious invention. One of the biggest buzzwords in technologies of the current times. One can easily find Blockchain as if in keynote speeches at conferences, Google search, trending video, and even your favorite gym.
Well with the innovation in evolving technology, blockchain attracts companies of every size. Real adoption of blockchain is in for insurance companies, food supply, finance, law enforcement, identify cross border transactions & many more. Blockchain technology has the potential to make transactions more secure& transparent. Despite developing unique and various use cases, there is a slew of challenges. That needs to be solved before adopting blockchain on a large scale.
Let’s have a look at the five major challenges blockchain is facing in 2020.
The Major Limitation and Challenges of Blockchain
Functional scalability issues
Brain drain because of high energy consumption
Lack of security and legal uncertainty
Regulation in the ecosystem
Low awareness and understanding
1. Functional Scalability Issues
One of the hurdles in Blockchain is implementation issues. To get a clear insight, let understand through the example of bitcoin. For example, the bitcoin blockchain is expanding at 1 MB per block every ten minutes. Currently, it has a size of 241 GB. While an Ethereum full archive node currently takes up over 3 terabytes of data.
While another issue could include time taken issues. IN the case of the blockchain development the validation takes several minutes. Because the maximum capacity of transection of bitcoin is around seven transactions per second. Blockchain networks are slow, which make it’s unviable for large scale application.
2. Brain Drain because of High Energy Consumption
Ever since its inception Bitcoin trust minimizing consensus has been enabled by its proof of work algorithm. The machine performing needs around 200 GB of storage space in every node that is part of the blockchain network. Along with that other requirements are 5 GB upload & 500 Mb download every day.
0.2% of the total electricity is used by miners presently. If it continues to increase then, Miners will take more power than the world can afford by 2020. This is the main reason many organization is avoiding blockchain.
And to control the situation, blockchain can utilize the Consensus method to validate the transitions. As consensus algorithm requires very little energy to process. And this is a genuine way to bring blockchain technology in business again.
3. Lack of Security and Legal Uncertainty
Another factor that challenges Blockchain is the lack of talent to build a decentralized application. No matter what perks blockchain technology has a flaw in coding or loophole is one of the significant challenges in it. Because of false coding and loophole, one can use this deception and can hack the system easily.
Not only that but Blockchain Decentralization can redefine data privacy. As anonymous features of the blockchain not only attract experts but criminals too. Because the nature of the network is decentralized so that no one can know your true identity. This is the main reason for targeting bitcoin, as it is used as a currency in the black market and the dark web. While many criminals use cryptocurrency to purchase an illegal weapon. To stop the increasing criminal connection halt blockchain implementation.
4. Regulation in the Ecosystem
TheFourth major key challenge of blockchain is a decentralized ecosystem. As many organization uses blockchain technology as a means of transaction. But as there is no specific regulation about it, no one follows any rules when it came to the blockchain. It results in significant risk for anyone who wants to get involved with blockchain.
A well-decentralized ecosystem consists of multiple layers, and many layers are still are under development.
5. Low Awareness and Understanding
Many professional experts in finance have less or no knowledge of blockchain. That is another challenging factor in its evolution. 99% of people failed to understand blockchain or bitcoin or cryptocurrencies. Well, you can not blame the mass, as much of the blockchain discussion tend to be technical. As in the world 0.5% of the world using blockchain technology. And in that blockchain app development companyis one of them.
To make it viable a new tact is required to skip its painful explanation. So that more people can use it and it gets a chance to fight for its existence.
Blockchain technology is still evolving. However, to implement on large scale it involves an array of serious challenges that need to be addressed. The current focus to make this new, innovative technology widely available.
Also, many of the issues get resolved based on how they get implemented.
Today, private and permissioned blockchain is being integrated. At the top, hybrid of various blockchain protocols are adopted to achieve what’s needed. This also nullifies many of the above-mentioned limitations. Hence, anything that is built on the blockchain is very transparent and everyone involved is accountable for their actions.
Since blockchain technology has drawn the curtains, there have been tons of improvements in the technology. The biggest one being cryptocurrency like Bitcoins, which has brought a new revolution in the financial world. However, there are many other cryptocurrencies like Ethereum, Litecoin, and Dash with distinctive features, but Bitcoins have set the bar way high.
While most blockchains only use nodes, masternode is a revolutionary feature in this industry. This second-tier network of servers has a real-time full copy of the blockchain all the time. Masternodes are known for better speed, faster transactions, effectiveness, and easy governance on the blockchain. Blockchain has been known for its data integrity and reliability. Many experts believe that blockchain technology may soon replace traditional database systems. But, there are many pros and cons of blockchain too. Also, there are many misconceptions about this technology around. Here, we are list down the features of the expectations and reality in blockchain technology:
1. Global Decentralized Technology
Blockchain is assumed as a global decentralized supercomputer. Came into the limelight after the Bitcoin development phase, blockchain supported cryptocurrency trading on the internet. But how does it work? Blockchain verifies the transactions by performing operations. In one block, a certain number of transactions are recorded, and the block is linked to the latest block to keep the information up to date. Blocks carry transaction records. These blocks are connected to each other like a chain. It is not managed by any supercomputer or server. In fact, the distributed network of millions of computers worldwide managed it.
2. Anonymous and Transparent for Data Privacy
Blockchain supports cryptocurrency transactions. The transaction address is encrypted codes that are not linked with personal information. Transactions are anonymous and easily traceable. But it is not purely right! Transactions taking place between acquaintances, the history of the operations can be found with the owner’s address linking up. Between companies, trade histories are visible. Contacts and sale info are on display. One can look into the transactions. So, blockchain is not private and keeps your information private.
3. Not controlled by a central authority
No individual or company controls cryptocurrency. Also, it is not dependent on any system or server. It has become nearly impossible for an individual to mine Bitcoin as a specific machine is required to do the task. Miners build mining pools and carry the mining task. It is a misconception that a central authority controls the blockchain.
4. Legal Currencies will disappear
It is well-known that cryptocurrency does not exist in any tangible form. Cryptocurrency has tons of expectations, including direct money transfer, cheap transaction fees, no complications in transactions. People expect that with the boom of cryptocurrencies, legal notes will disappear. It is a sham and nothing else!
But, there is a big catch as the cash or liquid money will not go anywhere. Transactions in trading experience a time lag that doubts the permanent usability of cryptocurrencies. Also, as the number of cryptocurrency transactions increases, the time lag increases, which means currency transfer takes longer. It does not make it a practical currency for long-term usage.
5. High Scalability
Cryptocurrency working with blockchain concepts seem to be highly scalable. As the number of transactions increases as per user, the issues of scalability will generate. The capability of the system to handle a growing amount of users and to accommodate the users’ growth is the problem here. As the number of transactions exceeds and it causes an overflow of blockchain. Further, the time lag between payment sent and received increases.
Short-term or Long-term strategies?
Expectation- After seeing the projects increasing at an unbelievable pace in weeks, people got addicted to unsustainable strategies. And, according to them, people do not find it necessary to think that all the projects are different. They just put their plan under the “cryptocurrency” tab with the same expectations for each project. Reality- Every project is different and has different goals & purposes; there is no need to put all your projects under the same tab and expecting the same growth for each project. In reality, many industries are out there that don’t work like this manner. A lot of businesses realized the importance of sustainable practices and hence profoundly care about the project goals and the tech required behind them. They focus on building a sustainable business and strengthen the brand with a long-term vision. These people would be best described as long-term traders.
And then there are some people who are in it just for the sake of money. In the world of blockchain technology, there are opportunities for people to make money with blockchain. As soon as people realize that blockchain meant to make money, they jump on it as their gold card. Without focusing much on project objectives, pressuring projects into exchange listings that only bring value to them — these people would best be described as short-term supporters.
Well, there is a place for both long term and short term strategies. There’s chaos when once one side massively outnumbers the other.
Effective Project Development is the Key
Expectation: As we all know, we humans rationalize our decision based on the trends that are happening around us. All of us. When an investment’s price rises over an extended period, then it becomes hard to tell what was impacting the bull market. And, it becomes tougher to believe that this could just be happening due to the frame of mind, not advancements of technology.
Reality: In reality, the only rational explanation is that the more you focus on your project, the better your app idea is, the better it is for people.
But this has a negative effect when the project was performing worse or doing something wrong. But, this was not the case.
Compared to other industries, Blockchain-related projects are more transparent. Always communicate and collaborate with users and supporters. This can enable them to see the development process on-hands.
Blockchain is serving many industries with its new and increasing demand in the tech world. It has not limited itself to just cryptocurrencies. But it is not going to solve every problem in the world. There are many pros and cons to the blockchain. That’s why blockchain must be implemented safely in the best possible way. There have been many assumptions made across the blockchain spectrum, and expectations are built upon those assumptions. But, all of them might come true. So, before getting into cryptocurrencies or taking any decision with blockchain tech, please get to know more about blockchain and its reality.
China’s political and economic system is at its worst possible time because of coronavirus. Several Chinese businesses and factories are now struggling to reopen business activities. The majority of businesses’ are operating below their capacity due to the Coronavirus plague. Chinese Government is using every tactic to tackle this virus and to minimize its effect on the populous. Nodoubt, china is the world’s second largest economy and you can see their growth over time.
Breakdown of China’s Economy because of Coronavirus
In today’s date, China is now the 2nd-largest economy in the world, estimating for 16% of global GDP. Whereas in comparison, in the same time period, the U.S GDP never topped 3%. Anyhow, china’s overall GDP is almost 9 times larger than it was during the SARS outbreak in 2002-2003. But due to this deadly plague, it had impacted China’s Economy, along with Japan and Vietnam. As they import material and parts from china. I won’t be wrong if we say they relay on the Chinese supply chain.
But now china grapples due to coronavirus, the economic damage is mounting around the world. Businesses are dealing with great loss in revenues and disrupted supply chains due to china’s factory shutdown. 10 million people remain lockdown in dozens of cities because of the corona.
The pandemic plague has hit a lot of economic activities and transactions in the world. Sadly, several crypto conferences and events have bee postponed or closed because of this outbreak. A devastated economy of China, bring a devastating effect on the world market too. The blockchain technology is easily available to China 2019s beckon to weather the storm.
As the United state-backed away, china had an opportunity to move into high-potential technology by investing in blockchain. China’s most important goal in developing blockchain would be to help create a digital currency. Not any new cryptocurrency like Bitcoin, simply making already – the existing monetary base digital. Blockchain can be fundamental for tracking & recording transactions & creating a new unit controlled and distributed by the regime. It can further enable china’s digital economy where half of all digital transactions Totaling over 9 trillion last year.
The Rise of Emerging Tech in China
China is indeed aiming for technology supremacy, pumping billions into emerging industries from biotech to artificial intelligence. But digital currency would enable China to not only harvest the benefits of digital transactions, but also possibly gain a look at where the money is being used, and by whom, restricting money laundering and following a growing environment of surveillance.
Along with that, blockchain serves as a barrier against international cryptocurrencies. And also helps the government to retain control of the money supply.
Moreover, this would help easily China’s increasingly cashless society.
IN this deadly storm, blockchain might be the closet port to help them to get out of it. Let’s hope they opt for it, because of china’s economy whole world economy is at stake. China is organizing to dispersed technology, requiring that all “nodes” using the blockchain register with the government and provide information on their users. It doesn’t help to achieve blockchain’s goals of privacy and transparency. But In contrast, it has implications for human rights as China traces loyalty through financial transactions. As data is astonishingly complicated to be edited once added to the blockchain, it makes participating in party loyalty apps and purchasing censorship-free materials, becoming more difficult to avoid as China moves towards a more cashless society.
Facebook is showing an era wherever centralized Blockchain acceleration in adoption can considerably change the long term of crypto-economics that is beginning to meet with payments.
This happens to be the specialty of distributed ledger technology and blockchain’s unbelievable performance improvement merging public and private networks and making transactions more efficient.
Blockchain adoption has recently gotten a significant boost — not simply through traditional players within the banking world like Chase, but also through social media. Facebook has been rapidly assembling a blockchain team tasked to figure with the emerging technology. It also recently opened a spot for a blockchain attorney to assist potential business partners. The social media giant is also looking for venture capital firms to invest up to $1 billion in its blockchain project.
Payments giant PayPal has also begun investing in blockchain technology. It recently joined a Series A funding round for Cambridge Blockchain, a digital identity software provider that combines blockchain with an off-chain personal data service to validate the identity of parties, legal entities, and devices.
Facebook’s Project Libra:
Facebook’s potential growth into crypto has been widely mentioned within the past few months. Although the social media giant has not confirmed something on the far side having a blockchain department, new details about its digital token project continue to surface. Facebook has been rumoured to be involved with cryptocurrencies for at least a year now. It plans to rebuild its messaging infrastructure and merge its three wholly-owned apps — WhatsApp, Messenger, and Instagram — under one platform. This would give a future crypto token with exposure across the combined 2.7 billion who use the three services each month. The existence of Facebook’s blockchain research and analysis team remains to be the sole official confirmation that the social media corporation is involved with crypto. The arm is led by David Marcus, ex-PayPal president. Facebook is exploring ways to leverage the facility of blockchain technology. This new team is exploring many alternative applications.
PayPal’s First-Ever Blockchain Investment
The specific amounts invested by PayPal were not disclosed by any part, but SEC filings indicate that Cambridge Blockchain raised a total of $3.5 million from several investors over the course of nine months. PayPal invested as part of an extension stage to a series A round, whereas the main series A round raises $7 million. The total then would be $10.5 million. This seems to be an excellent first investment in the blockchain sphere for PayPal. It can have a direct use for Cambridge Blockchain’s business efforts. They indeed hold sensitive user information and the more secure options they have for handling user data, the better.
Overall, they would improve the processes around user on-boarding of personal data which included KYC processes, vetting of financial bank accounts and other counterparties.
Blockchains, while holding interesting potential, particularly in the world of finance, are still in their early days. We have not nonetheless seen use cases within the financial area that are extremely differentiated and notably compelling, but we remain engaged with the broader ecosystem and are interested in how blockchain may result in demonstrable benefits for financial services and other industries.
It also holds the potential to be the next thing that would drive greater messaging adoption and make its tools the key facilitators of a wide range of daily functions. For digital marketing, this might be a significant shift. Even if it does play out as predicted, it’ll take some time to make its way to western markets. But it may change everything about how you connect with your audience.
Instead of relying on advertisements that disrupt the online experiences of their target audiences, native advertising allows marketers to create “in-feed” and inherently non-disruptive promotional content that supplements the online experience of a user, such as promoted tweets on Twitter, suggested posts on Facebook and sponsored content on Buzzfeed or Mashable. Content marketers are increasingly turning to native advertising because it is known to be building trust and engagement with prospective customers than traditional display advertisements.
The blockchain is a record-storing innovation, which enables users to contribute information to a chain, which is a kind of a “digital ledger,” before it gets locked by other computers in the network. The entire blockchain system is secure, non-auditable, transparent and efficient.
The combination of these factors develops trust and promotes confidence at every level without having to know the person at another end. The blockchain is essentially a database that exists in multiple duplicates on different PCs.
These PCs follow a shared system, implying that there is no single, centralized database or server, rather the blockchain database exists within a decentralized system of machines, each serving as a hub on that system.
A survey by Facebook and IHS Inc. found that native ads can form up a calculated 63% of mobile display ad spending by 2020. Furthermore, the research found that media buyers will spend $84.5 billion on mobile ads. Native in-stream ads will account for $53 billion in digital ad spending by 2020. This proves beyond any doubt that native advertising is the next big thing in advertising and marketing. Consumers are tired of disruptive advertisements and their attention spans are diminishing rapidly.
To revive consumer interest, marketers have no choice but to use “inbound” marketing strategies, like native advertising, which by virtue of it seeming like part of the story, is natural to the point of being indistinguishable from the main content.
How Blockchain can benefit Native ads?
Customized Native ads
The design of native advertisements can be customised so that users can better interact with customers and obtain incentives. Native advertisements are an advertisement type presented by specific media in a more relevant way based on the material from advertisers. The goal is to include some elements in the form of native advertisements based on blockchain ecosystem and let users better understand that an advertisement is from that ecosystem, so that they can engage more proactively.
2. Native Advertisements feed
Advertising is content. Through combining advertisements with different types of content feed, applications will keep users for longer. Information traffics native advertisements basically lead new forms of advertising to switch from single advertising format to content feed. Native advertisements feed provides personalized recommendations based on user feedback, including both content and advertising. There are various navigation categories, such as news, video, food order, clothing, and cosmetics, etc. Users can switch on their individual content feeds from the chosen categories of interest. In each of the chosen categories, users can browse news or videos, order takeout or purchase desired advertisements. The system will give a personalized recommendation based on user feedback and users can also comment on given content and advertisements.
Blockchain technology holds excessive possibilities for every marketer with an interest in native advertising. On the one hand, native advertising in its many forms is growing very rapidly. On the opposite, blockchain applications are rolling out on an everyday basis. Platforms that combine one with the other offer great opportunities to get ahead of the competition.
In case, you are looking to understand blockchain and its implications in your business sector in more detail, drop us an email on [email protected] or schedule a free consultation with our team of blockchain experts who can guide you through the blockchain implementation in a specific use case.