In a recent couple of years because of cryptocurrency boom blockchain, the underlying technology also got a lot of traction in the industry and technologist started to look into its various features and try to utilise it to solve some real-world problems. In this article I am going to discuss the challenges blockchain is facing to become mainstream. To summaries it can be categories into three.1: scalability
2: privacy leakage 3:selfish mining
These three categories are technical challenges. Other than this some economical and financial challenges are also there which I will discuss at the end of the article.
Any kind of blockchain framework we take currently not that much scalable to be used in production where thousands of transactions per seconds are needed. People are working on improving it and platforms like hyperledger-fabric are quite good but still, improvements are required.
2. Privacy Leakage
The blockchain is believed to be very safe as users only make transactions with generated addresses rather than real identity. Users also could generate many addresses in case of information leakage. Besides, the recent study (Barcelo, 2014) has shown that a user’s Bitcoin transactions can be linked to reveal user’s information. Moreover, Biryukov et al. (2014) presented a method to link user pseudonyms to IP addresses even when users are behind network address translation (NAT) or firewalls. In Biryukov et al. (2014), each client can be uniquely identified by a set of nodes it connects to. However, this set can be learned and used to find the origin of a transaction. Multiple methods have been proposed to improve the anonymity of blockchain.
3. Selfish mining
The blockchain is susceptible to attacks of colluding selfish miners. Generally, it is convinced that nodes with over 51% computing power could reverse the blockchain and reverse the happened transaction. However, recent research shows that even nodes with less 51% power are still dangerous. In particular, Eyal and Sirer (2014) showed that the network is vulnerable even if only a small portion of the hashing power is used to cheat. In selfish mining strategy, selfish miners keep their mined blocks without broadcasting and the private branch would be revealed to the public only if some requirements are satisfied. As the private branch is longer than the current public chain, it would be admitted by all miners. Before the private blockchain publication, honest miners are wasting their resources on a useless branch while selfish miners are mining their private chain without competitors. So selfish miners tend to get more revenue. Rational miners would be attracted to join the selfish pool and the selfish could exceed 51% power quickly.
As blockchain technology is hyped too much these days people are trying to use it everywhere and this not practical. Blockchain implementation is more costly. Setting up the private network and maintaining it is difficult. Very few good developers are there who understands the technology. And where it should be used so that it can really create some value for the organisation. As currently, I see in supply chain people want to use or with IoT data etc. But until or unless by using this and ROI is not good for companies they will not adopt it. And this is the reality of Industry that currently, it’s not making much of a difference for the organisations either they use it or not.