6 Potential Blockchain Limitations for Enterprise Use


The potential benefits of blockchain for enterprise use must be weighed against blockchain's limitations. Here are six.

1. Performance

As Kevin Hobbs, CEO of blockchain consulting company Vanbex Labs, explains, blockchain adopters must take into consideration the technology's performance limitations.

When a transaction is being processed, a blockchain has to go through everything a normal database does, plus some extra steps.

"Since every blockchain transaction must be digitally signed, there is the burden of signature verification. In contrast, centralized databases do not need verification and are thus faster," Hobbs explained.

Blockchains also require more computation than centralized networks, Hobbs said.  "Whereas centralized databases process transactions once -- or twice -- in a blockchain, they must be processed independently by every node in the network," he said.

Bitcoin, for example, processes seven transactions per second. By comparison, Visa, using centralized database technology, processes transactions roughly 370 times faster, handling around 1,700 transactions per second. Blockchain projects have taken steps to boost transaction speeds, but have not caught the competition, and many experts believe they will not due to the technology's architecture...

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