Current Blockchain Issues
Regardless of whether they are public, consensus, or private, blockchains have various problems such as interoperability, network latency, rising network fees, and storage risk with NFT data.
Here are some of the problems with blockchains we will try to minimize in our proposed solution.
Main issues of blockchain:
Soaring Transaction Fees
Due to the high computational demands necessary for transaction validation, blockchain networks can be slow and inefficient. As the volume of users, transactions, and applications grows, blockchain networks struggle to process and validate them promptly. Consequently, blockchain networks are not suitable for applications that necessitate rapid transaction processing speeds.
Consensus algorithms such as Proof of Work (PoW) and Proof of Stake (PoS) are utilized by traditional blockchains like Bitcoin and Ethereum. However, these algorithms can be time-consuming and require a significant amount of resources. Consequently, these networks experience restrictions in terms of transaction throughput, frequently resulting in congestion and elevated transaction fees.
Different solutions have been suggested in order to address scalability problems, such as scaling systems designed for establishing off-chain channels, which enable quicker and more economical transactions.
Although blockchain experts have made some progress, the achievement of scalable, efficient, and decentralized blockchain networks remains an ongoing challenge that requires further exploration.
Network Congestion
One of the issues that emerged on the Ethereum platform became evident during the peak of the blockchain game 'Crypto Kitties', where the entire blockchain appeared to come to a standstill, highlighting a significant problem.
Irreversible Transactions
Transactions made on a blockchain cannot be undone or reversed once they are confirmed. Therefore, it is crucial for the sender to exercise caution and double-check that they have entered the correct recipient address for the transaction.
High Computational Costs
PoW-based consensus mechanisms maintain security with their high computational power. However, this method is energy intensive and has a high environmental impact. The validation of transactions on a blockchain network necessitates significant computing power, which consequently demands a substantial amount of energy. As a result, worries have arisen regarding the carbon emissions and environmental consequences associated with blockchain technology. Several blockchain projects have embraced alternative consensus mechanisms like PoS or DPoS, which consume considerably less energy. Efforts like Ethereum 2.0 also strive to decrease the energy consumption of the Ethereum network. Despite the promise of these initiatives, it is imperative for the blockchain community to persist in exploring methods to minimize energy consumption and create environmentally sustainable solutions.
Security issues with PoS
There are increased security risks when there are fewer computers governing the network. Specifically, if an individual gains control of more than ⅓ or more of a cryptocurrency, they will have complete control over the entire network. While proof of stake poses a security risk if a few owners have significant control over the network's currency value, this scenario is improbable for widely held currencies.
NFTs and the permanent linkage of content data stored in decentralized storage
A significant portion of the content linked to NFTs is not directly stored on the blockchain. Instead, it is stored in external storage systems. However, if these external storage systems become non-functional or the data stored within them is lost, the symbolic and inherent value of owning an NFT also vanishes. This means that the unique and exclusive nature of the NFT, which is derived from its symbolic data, can be jeopardized in such situations.
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