The first blockchain was invented and designed by Satoshi Nakamoto in 2008 and realized the following year as a core part of Bitcoin, when blockchain technology acted as a ledger for all transactions.

Since its inception, blockchain has significantly impacted many areas, including blockchain gaming, in our daily lives. Blockchain is a new technology with its own challenges. If you are wondering why blockchain adoption is slowing down, then this post will cover the top 10 blockchain adoption challenges.

Top 10 Blockchain Adoption Challenges: What Are They?

Here is a list of the top 10 blockchain adoption challenges that are slowing down the system today:

The Criminal Connection

Did you know that the anonymity feature of blockchain technology attracts not only professionals, but also criminal individuals? Why? Because of the network’s decentralized design, no one can discover your genuine identity.

Criminals now use these cryptocurrencies to purchase illegal devices and limited payment methods. They also ask for cryptocurrency in exchange for the ransom. The only way to deal with this is to stop connecting criminals and to implement better blockchain technology once and for all.

The absence of strict legislation and the fact that blockchain is still a burgeoning technology has fueled the proliferation of scam projects and other bad actors looking to profit from inexperienced investors. There have also been a number of well-known crypto exchange thefts, including the infamous bitcoin heist of Mt. Gox in 2014, which almost destroyed the entire 

Poor Scalability 

One of blockchain’s most important technological challenges is the technical scalability of the network, which can hinder adoption, especially for public blockchains.

Legacy transaction networks can handle thousands of transactions per second. For example, Visa processes over 2000 transactions per second. However, the two most popular blockchain networks, Bitcoin and Ethereum, lag far behind in transaction speeds.

While the Bitcoin network can only execute three to seven transactions per second, Ethereum can handle up to 20 transactions per second.

Since the nodes in the network are specifically designed to process transactions in an environment of trusted parties, this lack of scalability is not a concern for private blockchain networks.

This challenge needs to be tackled pretty quickly, as it is making the whole technology dull. Organizations that can successfully scale their enterprise blockchain platforms will successfully profit from the growing demand for enterprise blockchains and related applications.

High Energy Consumption

Another challenge of blockchain adoption is its high energy consumption. Most blockchain technology follows the bitcoin infrastructure and uses Proof of Work as the consensus algorithm. Users have to solve complex math puzzles to use these protocols, and they need a lot of processing power to validate and execute transactions and secure the network. So your PC will consume more power to fix this situation when you start mining.

Currently, miners are using 0.2% of the total electricity. If it continues to rise after that, miners will take up more power than the world can offer. Therefore, it is now becoming one of the main challenges of this network.

Many organizations are trying to avoid blockchain entirely because of this challenge. That is why the situation needs to be kept under control, as it is one of the main challenges in the adoption of blockchain technology. But how?

Well, the blockchain can use other consensus methods to validate conversions. Consensus algorithms require very little power to process.

This is the only way we can really make blockchain technology successful again.

Lack of Adoption

Blockchain has a problem with its perception. Too many people associate blockchain with cryptocurrency. In particular, cryptocurrencies are associated with scammers and hackers abusing the technology.

This lousy representative reflects poorly on the entire blockchain technology system, causing individuals to reconsider their decision to adopt it.

To function correctly, blockchains rely on widespread adoption. To implement tracking and tracking capabilities in a supply chain, an organization will have to adopt a blockchain network, as will its suppliers. APQC has found that only 29% of organizations are testing or fully using blockchain. Without widespread adoption, blockchains will remain inefficient and scalable.

However, there are some signs that blockchain adoption will continue to spread. Businesses are gradually coming together and forming collaborative working groups on blockchain to solve similar problems and provide solutions that can benefit everyone without providing an information monopoly.

Rising Cost of Blockchain Implementation

One of the major challenges in blockchain implementation is the cost of the entire process. Because most of the current blockchain platforms are quite inefficient in terms of transaction speed and energy consumption.

For example, the bitcoin network only handles between 3 and 5 transactions per second, which consumes a lot of energy in the process. Ethereum, on the other hand, can manage up to 15 transactions per second. All of this is too low compared to VISA because it can execute 1,667 transactions per second.

Essentially, enterprise blockchain platforms run on a similar framework to bitcoin and others. Because the bitcoin network was the first to be launched in the tech world, it is the network that inspired all other blockchain-based technologies that exist today.

However, popular enterprise blockchain platforms have made great strides in terms of transaction speed.

In short, you have to be willing to pay for the convenience that comes with new technology. Even if most of the current solutions are free, significant investment is required when hiring skilled software engineers specializing in blockchain development; licensing fees in the case of switching to a software version that is cost-effective; overall administration; etc. This is one of the most important blockchain implementation challenges.

Privacy Challenges

In this day and age, many businesses adhere to strict privacy policies set forth by law. Their customers put their trust in them with personal information. However, if all of this information were put into a public ledger, that information would no longer be considered private.

Here, a private or consortium blockchain can be useful. You have restricted access and all your personal information will be kept confidential as usual.

Another important aspect is security. However, there are only a few cases where appropriate protocols are available to deal with this problem. While blockchain is more secure than traditional computer systems, hackers can still compromise blockchain-based applications, systems, and businesses.

Regulation

This is one of the main blockchain adoption challenges in an organization. Many organizations are turning blockchain technology into a medium of exchange. You will see many products that depend on this. But there aren’t any explicit rules about it right now. So far, no one follows any particular rules when it comes to blockchain

Now, this is where the issue comes in. While blockchain ensures visibility as one of its benefits, there is still no security. You won’t be able to be certain of its safety for you. To overcome these challenges, governments and extremely regulated sectors may need to create regulations for blockchain.

Security Problems

Security is one of the blockchain adoption challenges. We all know that every blockchain technology prides itself on its security. But like any other technology, blockchain also comes with some security loops.

The 51% attack on the network is one of the security flaws of the network. In this attack, hackers can take over the network and exploit it their way. They can even change the transaction process and restrict others from creating blocks.

The protocol layer needs better security to handle this. We have seen some of its security holes so far. However, there are only a few cases where there are good protocols that can deal with this. So far, no one knows if they are safe to use in the long run.

Public Perception

One of the other major challenges facing blockchain technology adoption is the lack of a knowledge base. In fact, most of us are still unaware of the existence and usability of this technology. If we want the blockchain to be successful, it must be accepted. While this technology is making history, it’s still not enough to attract more consumers.

Currently, blockchain technology means almost the same as Bitcoin. Most people just think of Bitcoin as the only blockchain network. Others don’t even know about it, except for cryptocurrencies.

Before it can be applied in general, everyone needs to understand the difference between bitcoin, other cryptocurrencies, and blockchain. This will help eliminate the negative effects of cryptocurrencies and make the technology more advanced. It will be the result of increased readiness to use technology.

Insufficient Knowledge-base on Blockchain

Blockchain as a technology is evolving. Notably, most of the solutions offered are novel, and they are mostly technical for the majority of people in the industry. However, organizations do not have people who clearly understand the concept of blockchain and enterprise blockchain in general. So this is one of the other blockchain adoption challenges that hinders the growth of the field.

Some organizations lack information regarding aspects such as choosing the best enterprise blockchain platform to adopt. Furthermore, companies are not aware of the proper blockchain implementation steps to ensure the best results and optimal use of the technology.

Interestingly, blockchain technology promises to solve many problems that were initially incurable. This technology promises to reach almost every type of industry, from supply chain management to identity management. Therefore, organizations need to be clear about their blockchain needs so that they can decide the best enterprise blockchain platform.

To successfully accomplish the goal, the organization will need to have sufficient knowledge of the internal blockchain. Interestingly, they can try to fill any gaps by hiring outside talent. However, there is still a shortage of skilled people who can successfully achieve their goals. As a result, blockchain-related project implementation becomes difficult for companies.

Conclusion

Above are 10 outstanding blockchain adoption challenges in the blockchain technology industry. And the industry is working to address them. Without a doubt, things will become more comfortable and enable mass adoption if we can fix these and remove these bottlenecks.

At Satom, we have a specialized team of highly knowledgeable blockchain developers who are well versed in identifying all the potential blockchain adoption challenges, as well as the ability and research ability to solve them.

Contact us, and we will be happy to assist you in incorporating blockchain technology into your business