What are Blockchain's Issues and Limitations?

Blockchain issues are the limitations of blockchain technology in the present world. As this technology is new, there are many limitations that are required to be solved.

11 November 2019, AtoZMarkets – Before proceeding to the blockchain limitations, it is important to understand what this technology entails. Blockchain is a distributed ledger system that was proposed in 2008 with the idea of Bitcoin.

This system is decentralized & immune. Therefore, we cannot delete the information form the blockchain store. These characteristics prevent problems like fraud or stealing information.

However, there are other technologies that compete with the blockchain, like SQL Server & Oracle. While this technology has its benefits, there are some blockchain limitations.

What are Blockchain Issues and Limitations?

Blockchain is a world-changing technology in many ways. However, it isn’t necessary to clear all the problems so, there are some Blockchain Issues.

Complexity of Blockchain

It is possible to have some Blockchain issues as the technology is very new in the world.

Blockchain technology has many applications that are suitable for holding information secured. However, it is not the only option available for putting this information. Besides blockchain, there are other options available in the world.

The introduction of cryptocurrency makes the blockchain familiar to the open world. However, only a highly specialized industry can use this technology. The main element here is cryptography that runs the blockchain. Nevertheless, most of the people in the world cannot afford to use the technology.

Thankfully, there are several efforts at providing glossaries and indexes to eliminate Blockchain Issues.

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Security of Blockchain

The "51% attack" is one of the most blockchain issues. Therefore, a single organization can control the majority of a network's mining power.

For example, bitcoin's network depends on miners confirming transactions. Another name of this is the "consensus algorithm." This process determines which transactions have taken place. There is a risk that an organization can achieve control over most of the network's hash rate.  Therefore, it could potentially spend coins more than once and can prevent confirmation of certain transactions.

Implementing a 51% attack would give the attacker the capability to alter blocks from the blockchain. The most dangerous blockchain issues are that there is no straightforward method to prevent these attacks. The blockchain network is decentralized so people can team up the mining pools. As a result, they can achieve the required hash rate.

However, it requires massive resources to execute a 51% attack, changing blocks in the blockchain.

Blockchain Issues- Network size

Blockchains are not bad actors' resistance as they are ‘antifragile.’ Therefore, they respond to attacks and raise stronger.

However, a stable blockchain requires a large network of users. To achieve the full benefit, the blockchain requires a healthy network with a wider grid of nodes. Sometimes, it is hard to achieve a high profile blockchain to get benefit from it.

There are some debates about whether this a serious flaw for some granted blockchain projects.

Transaction costs

The transaction costs of one of the famous cryptocurrency, Bitcoin was nearly free for the first few years of its existence. Nowadays, the transaction cost has been increased, notably resulting in serious blockchain issues.

As of late 2016, it can only process about seven transactions per second, with the costs about $0.20. Moreover, it can only store 80 bytes of data. Now the block fee has increased to $0.79 with 10 minutes of time. The flow of the transaction costs is clearly indicating a blockchain issue.

As Deloitte Insights puts it, “blockchain-based systems are comparatively slow.” The transaction speed has become a major concern of the enterprises even they use high-performance legacy transaction processing systems.

Human errors

The errors in the Blockchain itself are rare, but it is possible to occur at the interface with wallets, etc. When it comes to the users, the blockchain provides inalterable protection against manipulative attempts. Nevertheless, this inability to change data will serve as blockchain limitations.

Moreover, the information going into the database needs to be of high quality. The data at the blockchain is not inherently trustworthy. Therefore, it is important to record in the first place.

The phrase ‘garbage in, garbage out’ works well in a blockchain system of record.

Blockchain Scalability

In order to scale a blockchain, it is necessary to increase the block size or decrease the block time by reducing the hash complexity. However, this is not enough now and this is clearly a blockchain issue.

In order to achieve the ceiling, the Blockchain needs to complete with other businesses like Visa. Currently, VISA is handling an average of 150 million transactions per day.

Compared to this, the transaction speed of Bitcoin is tremendously low.

Currently, the block size, which is set 1MB (1,048,576 bytes), can scale to up to a theoretical 4MB (380.04 bytes).  In addition to that, the average transaction size is 380.04 bytes. The average amount of transactions to fit into one of Bitcoin’s blocks is calculated as:

blockchain issue

The current block generation time for Bitcoin is 10 minutes. Bitcoin can average around 2,759.12 transactions within these 10 minutes.  In other words, Bitcoin blockchain can currently guarantee 4.6 transactions per second, which is another blockchain issue.

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Blockchain protocols are an opportunity to digitize governance models. Therefore, there have been chances for public discrepancies between different community sectors.

These discrepancies are a prominent feature of the blockchain industry. There is a clear expression around the question or event of the ‘forking’ a blockchain. Every blockchain user needs to agree on this before proceeding further.

These arguments can be very technical and sometimes excited. However, it is informative for those who are interested in the mixture of democracy. On the other hand, it is a new opportunity for the government is that the blockchain technology is opening up.

Lack of regulations

This is another problem with Bitcoin or other value-based blockchain networks. People who invested in bitcoin or other cryptocurrencies found this problem seriously. Due to the lack of regulations, there is a possibility of market manipulations. There are several Ponzi schemes like "Onecoin" that robbed millions of dollars from the investors. As this technology is very new, the legislators are struggling to keep pace with the innovators.

In case of hacking of the Bitcoin or other cryptocurrencies, there is no law to save the money from the investor’s pocket. This is a consequence of the lack of supervisory oversight across the sector.


Nowadays, blockchains are reliable networks. However, they are slower than their centralized counterparts are. We cannot express about millions of transactions per second. It is possible to achieve an ultra-fast “blockchains” with some middleware connection.

In fact, centralized service can provide such software. In most cases, this is an L2 solution (Lightning, Plasma) or that promise to gather many parallel chains. The performance of this modern blockchain may reach 1 000 - 10 000 tx/sec. However, there are many good approaches to working solutions in this area of software research.

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