What you need to know

What you need to know

While blockchain technology can transform entire industries, it can also have negative effects on the wider digital world. Bitcoin and other cryptocurrencies are digital currencies that can be freely exchanged online or transferred between parties in a peer-to-peer network directly without third-party intervention. But this new form of money has also been called the “mother of all scams” because of its intense volatility, the difficulty of verifying transactions and the high cost of entering the market.

In response to these concerns, several companies have developed blockchain-based digital currencies such as Bitcoin and Ethereum to replace existing financial systems and improve trust, transparency and security. But the technology can also have disadvantages. Here are some of the main disadvantages of blockchain technology:

Bitcoin Price Volatility

Due to its decentralized nature, the value of a Bitcoin can fluctuate wildly from day to day depending on supply and demand. The volatility can have a significant impact on business operations and startup success. Some investors may find the price volatility of Bitcoin too high and may decide to invest in other coins with lower volatility. But for many companies, the volatility of Bitcoin can be a big problem.

If a company uses a digital currency as a way to settle payments or as part of a transaction process, it must consider the risk that the price of the coin in question will rise or fall dramatically in the long term. If a company’s supply chain is completely dependent on the value of the coin in question remaining high, the company could find itself out of business very quickly.

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Lack of regulation

One of the biggest challenges facing startups and businesses facing blockchain technology is the lack of regulation in some areas. Transactions are mainly done on decentralized exchanges such as BTC Loophole and Bitcoin Profit. Companies will often ask the government for a license to operate to explore new business opportunities such as the potential of blockchain technology in the food and drug supply chains. However, in some parts of the world, such as India, using blockchain technology to track food or drugs is still considered a violation of food or pharmaceutical regulations.

In other parts of the world, such as in the United States, many companies have received special permission to operate under the guise of cyber security or white hat hacking. But even in the US, companies are often required to get special permission to use certain kinds of radical new technologies like blockchain. This can cause significant delays and bureaucratic problems for new companies trying to use blockchain technology.

High entry costs for small businesses

One of the biggest challenges facing startups and businesses facing blockchain technology is the high cost of entry for small businesses. This is because every new technology often has a learning curve that is far too steep for potential startups and businesses to overcome without help. For example, blockchain technology requires a huge amount of data analysis and significant computing power to function properly. This process can often take weeks or months to complete and is prone to human error. To make matters worse, the technology is often only reliable and effective when used by large companies with massive computing power and huge datasets.

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Inability to track transactions

One of the biggest challenges faced by startups and businesses facing blockchain technology is the inability to track transactions. This is partly caused by the distributed nature of the technology and partly by the growing popularity of online payments and transactions.

Online transactions currently account for approximately 60% of all transactions, but this figure is expected to reach 90% by 2020. This means that businesses will increasingly rely on electronic payments, which will make tracking payments much more difficult.

Concern over the blockchain’s capacity for scalability

One of the biggest challenges startups and businesses facing blockchain technology face is scalability. This is partly caused by the distributed nature of the technology and partly by the popularity of online payments and transactions. Currently, about 35% of all Internet traffic is consumed by online payments and transactions, according to the World Wide Web Foundation. This means there is significant potential for blockchain technology to disrupt this sector. But scalability issues can also be overcome by offering more services on the blockchain, such as supporting more cryptocurrencies.


To fully understand the advantages and disadvantages of blockchain technology, it is important to remember that it is still in its infancy. It has been in development for more than a decade. As such, there is still much room for growth and improvement. As the technology matures, it is expected to have many benefits. However, it can also be difficult to use, expensive to set up and subject to regulation. For these reasons, businesses and investors must remember that there is a risk when investing in blockchain-based assets.

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