People wonders if there is any negative impact of blockchain technology to humanity or whatever businesses blockchain is attached to- with all the promises of blockchain on changing how we transact in business. Well the answer is yes. Well, whatever has positive impact also have its negative impact. But in the case of blockchain, it has no adverse negative impact.
One major negative impact of blockchain technology is the high level of energy usage and foreseen environmental factors. Blockchain requires high computing power which means - more electricity and cooling power. for instance, Bitcoin alone by 2020 may be consuming as much energy as the whole of Denmark consumes.- Platformvaluenow.org,
Apart from the problem of energy consumption, blockchain also has blockchain also have problem with scaling. this is dues to the fact that , for transactions to take place in blockchain, it has to be processed by everyone and they all must have a copy of the global ledger. As time goes, blockchain requires more computing power and bandwidth.
Another limitations of blockchain is its complexity. - According to coindesk, blockchain technology involves an entirely new vocabulary and jargons . It requires a lot of technicality which must be handled by a group of professionals specifically in that field.
The Blockchain technology has been attached to a lot of myths and controversies since its inception and it is not expected to stop anytime soon. And for all the applications that is at the verge to make an attachment with blockchain, it won’t be so much of a benefit to them. some of the controversies attached to blockchain technology are discussed below;
When Bitcoin first made its thrust and gained its stability, there was a lot of reactions from banks. This is because Bitcoin became a threat, like it was coming to replace them, although they denied ever being threatened by Bitcoin. But the situation today has forced banks and financial institutions to agree with the technology behind Bitcoin. They believe that this technology can provide an efficient and reliable platform for settlement and for the issuance of digital assets.
Banks still shy away from Bitcoin despite their convictions because it is not a technology they can readily take control of and dictate its operations. Also they prefer a technology that will not require them exposing transactions publicly.
The main aim for the design and introduction of Blockchain was to obviate private firms. So the idea of creation of a blockchain company or private blockchain is only a waste of time because that was never the main aim.
Bitcoin was not created as a protocol or money, rather it is of itself a new business model, specially designed for open source software. The new business model have helped simplify things.
For example, the process has always been that you will need to raise funds, write software, build the business model yourself, then distribute your products before you can think of working towards liquidity. All this will be with the aid and guide of angels, salespeople, and bankers.
But the inception of Bitcoin has changed everything entirely and also reduced the processes.
Now the model of crowdfunding by Bitcoin dispenses with everything except the use of software and public presentation.
The case of misunderstandings by industries has been because they have refused to accept the Bitcoin technology and how it has simplified things.
Qualities Wrongfully Assigned
There are criteria that magically transforms simple database into the next VC fundraise and also slows down the correct understanding. They include immutability, inability to be hacked, and many more. This is what has made the technology adopted. The technology is immutable through the benevolence of a custodian and it is simply a magical property of blockchains.
There are still efforts being made by the Bitcoin Core team in other to reduce the storage requirements. This is because the features are very expensive that mobile clients don’t have the disk space required for it. What happens when a network starts growing is that the required bandwidth becomes significant, and so also the response time in tracking system state will also increases. Therefore to force immutability in a blockchain account, individuals may either actively pay for it, and for those that don’t store data, by incurring cost-based risks in the network.
To conclude on this, the Bitcoin blockchain immutability is not free, yet it is not costly. For systems that are not bitcoin inclined, these problems are well showcased. People who buy blockchain systems should be able to enquire the reasons why their competing institutions will be able to store their data. This is because it’s becoming more glaring that the promise of immutability will quickly be broken if any of the systems achieve scale.
There have been promises of the addition of magic features and this may have a negative advantage on wealthy VCs even if it doesn't happen immediately, yet there are speculations in regards to blockchain integrability and this has led start-ups to lose money. Bitcoin is by a design, a technology of its own and even when incorporated into a service cycle, it still doesn’t automatically cause the service to be cheaper. This is to say that, that blockchain may not be suitable to small scale businesses as it will incur a lot of money to maintain the technology.
Using remittance as a case study, it was generated that the first/last miles and also the advertisement chunks up majority of the costs and this is hard to dispute because of the facts. It is said that there’s a similarity in the cost of remittance being powered by Bitcoin and that of the one being powered by the traditional provider. This is because the local currency needs to have the same physical channels.
Generally, the advantage of using Bitcoin is that it makes remittance business cheaper. You can settle all your transactions in real time with Bitcoin, rather than allocating a large chunk of reserves to different locations.
So, what applications the blockchain technology is great for?
This understanding, however, was completely unnecessary to start building killer applications that we have today (e.g. Amazon, YouTube, Facebook, Uber). Back in 1992. The founders of mentioned services have gotten into the core of things quite late, haven't they? Similarly with "blockchain tech" right now. It is useful to understand the technical details behind how things work (consensus algorithms, cryptography, etc.) but trying to build business models without wasting time on learning too much technology is essential.