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T. Paul and S. Rakshit

6.9

Scalability

The scalability of the Blockchain is the key problem related to its adoption. Although

transaction networks can process thousands of transactions per second without any

malfunction, there is a remarkable slowdown in transaction processing when it comes

to Bitcoin (approximately 3 to 7 transactions per second) and Ethereum (15 to 20

transactions), rendering Blockchain unviable for large-scale applications.

6.10

Security and Privacy Challenges

Although cryptocurrencies provide pseudonymity, many future blockchain imple-

mentations require that intelligent transactions and agreements be unquestionably

connected to established identities, posing critical concerns about the privacy and

protection of the data stored and accessible on the shared ledger.

Many businesses now operate with privacy laws controlled by legislation. With

confidential details, their customers trust them. But if any of this data is kept in a

public ledger, it will not really be private anymore. Private or Blockchain consortiums

may operate here. Restricted access would be granted to you, and all your personal

details would remain private as they should.

Another critical issue is security. Only a few situations, however, have robust

mechanisms in place to address this. While blockchains provide a higher level

of security than traditional computer systems, hackers may still compromise

blockchain-based applications, networks, and businesses.

6.11

Technical Challenges

Developers are aware of the issues, as evidenced by a wide range of replies to the

problems posed, as well as active debate and coding of potential solutions. Insiders

have varying degrees of trust in whether and how these challenges can be overcome in

ordertomovetheblockchainindustryforwardtothenextstageofdevelopment.Some

claim the Bitcoin blockchain would be the de facto norm since it is the incumbent;

with the technology most widely distributed and such network effects, it cannot

help but be the standardized foundation. Others create various modern and distinct

blockchains (such as Ethereum) or systems that do not use a blockchain (like Ripple).

One major problem with the underlying Bitcoin technology is scaling up from the

current maximum cap of 7 transactions per second.