Limitations and Issues of Blockchain Technology

History has shown that innovations in various technologies spread at such a rapid pace among consumers and communities that the latter hardly paid a more serious attention to existing flaws and limitations of these innovations. Quite similar is the case with blockchain technology. Only through trial and error as well as through research and development experts in the field were able to understand its current issues and limitations.


First of all, blockchain technology is associated with tremendous complexity and an array of highly-specialized terms. Fortunately for people whose expertise falls outside blockchain, there are several on-line glossaries and indexes, which provide a profound and easy to apprehend explanation of both basic and more specific terms related to that industry. Examples of such websites are and

Network growth

Second, a blockchain’s network of users is vast and constantly growing, which facilitates a stronger response to attacks. In case a blockchain does not have a robust network with well distributed grid of nodes, it may not be possible to reap the full benefit of such a technology. However, there still is a risk of internal defects occurring and let us also not forget that there are physical limitations, because all the data has to be physically stored.

Risk of error

Third, there is always a risk of error occurring, as long as the human factor is involved. In case a blockchain serves as a database, all the incoming data has to be of high quality. If all occurring events are not originally registered with accuracy, then the trustworthiness of the stored data could be seriously in doubt. In case unreliable, incorrect information goes into the blockchain, then unreliable, incorrect data will also go out from it.

Security flaw

Fourth, Bitcoin as well as other blockchains are associated with one considerable security flaw, which was first brought to light by Satoshi Nakamoto when the cryptocurrency was launched. The flaw, also known as a ”51% attack”, refers to a situation when a group of ”miners” somehow take control of more than half of the blockchain network’s computing power.

It is a theoretically possible occurrence, as the Bitcoin network is free and open. In other words, if a miner or a group of miners somehow manage to acquire sufficient computational power (which is a very costly endeavor), there is no centralized authority to prevent them from influencing the entire Bitcoin network. This means the ”attackers” would be able to prevent new transactions from being verified, thus, they could stop payments between some users. While being in control of the network, the attackers would also be able to reverse transactions that were finalized during that same period of time. This means they could spend coins twice. On the other hand, what attackers would not be able to do is create new coins or modify already completed blocks.

Due to the existence of such a flaw in the system, Bitcoin ”mining pools” are subject to strict monitoring by the Bitcoin community. This way it is ensured that no user unintentionally gains such influence on the network.

Speed and cost of transactions. Blockchain Bloat

Fifth, during the first several years following Bitcoin’s launch, transactions in this digital currency were considered as ”nearly free”. As of now, however, transaction costs associated with Bitcoin are notable. At the end of 2016, for instance, every single transaction in Bitcoin cost approximately $0.20 and allows users to store 80 bytes of data.

As far as the speed of the Bitcoin network is concerned, currently only seven transactions per second could be processed.

We should also note that for some time there have been diverging views regarding the use of the Bitcoin blockchain. Some of the opinions claimed that the blockchain should not concern transactions, but data storage instead. This leads us to another debatable topic – the so called ”blockchain bloat”. The latter has both positive and negative aspects. A positive aspect is the increasing number of transactions on the blockchain. This suggests a larger number of people using that blockchain and also speaks positively for the adoption of the particular digital currency in a long term. More users and more transactions are the major factors behind the accelerated growth in the size of Bitcoin and Ethereum blockchains compared to almost any other digital currency in circulation.

However, increasing number of transactions equals increasing amount of data going into the respective blockchain. And, as more data comes in, this brings forth the matter involving the active storage of all that information. In such a case, the use of a hard drive with huge capacity is completely understandable, though it may turn out to be an issue for those who operate a network node. If Bitcoin and Ethereum blockchains keep on growing at their current daily rate, it may not be that long before we witness blockchains of a few terabytes in size.

When it comes to the negative aspects of blockchain bloat, we should note that as blockchains grow larger, the size of each block has to increase as well. In case that does not happen, then fewer transactions will be processed with each block on the network. And, in order to address such an issue, experts in the field have already proposed ”scaling solutions”.

Another aspect open for debates

Sixth, there is also a political aspect to blockchains. Since their protocols allow for governance models digitization and since miners represent another type of incentivized governance model, public disagreements between community sectors are very likely. Such disagreements can be concentrated mostly on a topic such as ”blockchain forking”, or a procedure aimed to update the blockchain protocol, in case most of the users within the network have reached a consensus to do so.

Despite that such debates tend to be quite technical, they may prove to be a good information source for people having interest in a combination of fields such as consensus, democracy and governance experimentation. Experts believe such a mixture is likely to be seen in blockchain technology at some point in the future.