Guest Post

What Are The Disadvantages Of Blockchain?

Author: Coinpedia

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Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]


    In theory, using blockchain to assure transparency and security can be a boon to global supply chain relationships. Visit and register for free to start trading Bitcoin. In addition, the withdrawals on this platform are quick with extraordinary security.  

    But in practice, many potential pitfalls and hurdles could derail even the most mature blockchain implementation. Here are nine significant drawbacks that you should consider if you’re evaluating blockchain for your finance and tech supply chain:

    1. Blockchain Is Not a Cure-All

    Blockchain has been touted as the perfect antidote to supply chain inefficiency. But blockchain is not a cure-all and cannot solve all your supply chain challenges instantly. There is no single platform to rule them all and no single tool that will work for every use case. What is more important than searching for the mythical blockchain cure-all is understanding what problems different platforms solve and how you can set up a realistic evaluation process to determine whether blockchain will genuinely benefit your particular challenges.

    2. Blockchain Is Not Single-Source

    One of the best use cases for blockchain is supply chain finance and transaction processing. But that’s not always the most practical application, and using a single-source, off-the-shelf blockchain can limit your decision-making. There are many distributed ledgers with different goals, strengths and weaknesses. Even in a simple payment transaction, you must consider more than just “is it on the blockchain?” Suppose you’re evaluating blockchain for your finance or tech supply chain. In that case, you need to clearly understand what these ledgers will deliver for your specific needs and use cases – because there are many functional differences among them.

    3. Blockchain Is Expensive

    The hype around blockchain can be intoxicating and lead you to overlook implementation costs. Set aside some money because it will take time and resources if you want to get a blockchain platform operational. If you’re evaluating a specific blockchain implementation, ensure you have the budget to develop and integrate the solution before starting any implementation work.

    4. Distributed Ledger Requires Change from All Parties

    Blockchain is an evolution of the way business has been done for ages. It is not a simple replacement of one existing process with an off-the-shelf technology or new business process. It will require changes to how you do business with your partners and suppliers, which can be challenging to swallow. It’s also a potential risk in terms of security if any intermediaries or business partners have access to your sensitive data.

    5. There Are No Standards:

     Decentralization introduces challenges in terms of interoperability, and interoperability introduces complexity – and complexity results in many more questions about how distributed ledgers work together. In addition, most blockchain platforms are open source, meaning different versions may be maintained by different parties, including third-party developers who may not have the same interests as you. And it also means that your best interests may not be served by the people who maintain the blockchain platform.

    6. The Cost of Bad Employee Behavior is much Greater

    In the age of distributed ledger, it is essential to anticipate external and internal threats. If a malicious employee can potentially access and manipulate the entire database in a blockchain, then that employee poses an equal or more significant threat than an external hacker. If you don’t take the appropriate precautions to secure your data, whoever holds that data will be at risk. Not all blockchain development teams have security as a priority; develop your solutions for securing access and choose your partners very carefully.

    7. Weak Pointer Management – Risks from Buggy Code and Insecure APIs: 

    Even with the best intentions, bugs can make it into production code. It’s difficult to detect and address these bugs in the source code, but finding and fixing them in the distributed ledger is even more challenging. With weak metadata management (such as no version control), you can create a mess of broken pointers that can result in many kinds of data corruption, including loss and manipulation of sensitive data.

    8. Regulatory Changes:

    The stability and security of blockchain may be affected by new regulations or new laws being enacted. For example, with European GDPR rules requiring comprehensive records to be maintained electronically and stored on servers within the EU, blockchain technology may be impacted by this regulation moving forward. In addition, regulations may be amended by users to mirror new use cases and applications more closely. 

    9. Learning Curve:

    Please do not underestimate the time it will take for your organization to learn about blockchain technology, evaluate it for use cases and deploy it in the real world. Even with working source code or proofs-of-concept, it can take months to get the technology operating at scale. Therefore, plan for a learning curve and ensure you have the resources available to see your blockchain implementation through design to production and integration.

    What Next?

    The evolution of blockchain technology is a complex and evolving process. Experts have barely begun to explore all the different types of distributed ledgers, the different use cases for each, the different design considerations at each stage in your supply chain and the different security solutions required at each level. So if you’re looking to evaluate blockchain technology, you’ll want to take a step back and plan.

    Disclaimer: This is a guest post. Coinpedia does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company.

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    Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

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