We constantly read about blockchain technology either as a savior, or as a curse. There are a wealth of pros and cons to consider when it comes to the blockchain, as with any new technologies. This isn’t a bad thing. It’s beneficial to highlight drawbacks to that innovation can take over. Yes, blockchain does boast some bad factors, thankfully though, the main advantage of the blockchain, it’s versatility, means that the technology can be adapted to overcome these drawbacks in the future.
Decentralisation. The big one. This on paper is great, a technology that does not require a private company to operate. A technology that can help automate endless processes without the intervention of a human, or even a physical computer. A drawback to this of course is anonymity which makes the technology a useful weapon for bad actors.
Automation. As we have mentioned, the blockchain is able to automate many processes, such as financial transactions in the example of cryptocurrencies like Bitcoin and XRP. Audit keeping and identity verification are more examples of processes that traditional require a middleman. Ok, so you could argue that automation through blockchain will put people out of jobs in the future, though we have to remember this - with the development of blockchain technology comes a whole new industry, an industry that is creating more and more jobs by the day. So yes, automation is causing challenges to some traditional hands on jobs, though going forward, the potential for new jobs and careers to be crafted as a result of this technology is vast.
Environmental impact. The major drawback of the blockchain is it’s environmental impact. Cryptocurrency mining (one of blockchains many processes) is very power heavy and uses very powerful computers to calculate tasks, tasks that are used to help the blockchain automate processes (such as financial transactions in this instance). Because of this, a huge amount of power or electricity is required and thus, blockchain has quite a large carbon footprint. We have to remember this however, when new technologies arrive, they are often bulky an inefficient. Overtime, as the blockchain becomes more integrated into our daily lives, the technology will become streamlined and thus, far more efficient and far more environmentally friendly. This is a drawback, but only for now.
Division. Lastly, a pro ad con combined. Blockchain technology can cause divisions between communities. For example, in crypto there are very significant camps that believe in competing ideologies surrounding how the blockchain can be used to preserve anonymity. This is a drawback as it causes conflict and tension, though many could view this as an advantage, as it is nurturing a healthy competition that is leading to innovation.