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Blockchain 101

Limitations of Blockchains


While blockchains are a very intriguing technology, they still have their limitations. As blockchains are a relatively new technology, there is a lot of uncertainty surrounding them. Regulators have yet to clarify the status of cryptocurrencies and are just learning about blockchain technology. Additionally, blockchains have not reached a sufficient level of scalability. Scalability describes the ability for a network to meet increased, real-world demand by being able to process transactions at a fast enough pace as to not create a backlog.

There are many projects working to solve the scalability issue, and many are examining different approaches to address the technological limitations of a blockchain. Centralized services such as Visa can process thousands of transactions a second. It is currently very difficult for a decentralized network to achieve this type of efficiency. Ethereum is looking to tackle this issue through the installation of their proposed Eth 2.0 protocol changes. Eth 2.0 is scheduled to be rolled out in stages, but Vitalik Buterin claims that it won’t be long until Ethereum can match Visa’s transactions per second. By the time the whole protocol is implemented, Eth 2.0 is alleged to be able to procewss about 100,000 tx/s.

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