Blockchain's Strengths and Weaknesses

Blockchain technology holds significant promise as a solution for a number of use cases in various industries, but as with any emerging technology, it still has its drawbacks. When looking at blockchain as a solution, one must weigh both its strengths and vulnerabilities in order to decide whether it is suitable for any given use case.

A Single Source of Truth

The primary benefit of a blockchain is its ability to provide a single source of truth for those who participate in the network. Since all nodes on a blockchain must reach consensus, this ensures that all participants are in agreement about the nature of the data contained in the network. The ability of a blockchain to settle disputes and provide a ledger of all activity on the network gives it a unique transparency that eliminates the need for middlemen. The transparency and immutability provided by blockchains also makes them ideal for industries that have regular audits of their data.

Transaction Speeds

The same characteristics of blockchain that are strengths in some use cases can also be viewed as weaknesses in others. For instance, the fact that blockchains must reach consensus on all nodes means that depending on the consensus protocol, performance in terms of transaction throughputs can often be quite slow.

Lack of Privacy

Blockchains, especially public blockchains, are not ideal for storing private information due to the transparency that they provide, even across untrusted, and unauthorized users. In healthcare, privacy considerations for protected health information are critical when considering blockchain technology for certain transactions.

Security Vulnerabilities

Blockchains provide resilience to certain types of attacks but are by no means entirely secure. Since blockchains are essentially just code, they are still susceptible to zero day attacks and technical bugs. Since blockchain systems are almost always accessed by people, they are also susceptible to one of the greatest risks in information technology, social engineering. Due to these facts, blockchains need just as much scrutiny towards information security as any other network or piece of software.

 

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