What are the potential drawbacks or limitations of block structured technology in the context of digital currencies?

3 answers

• Nov 26, 2021 · 3 years ago
  One potential drawback of block structured technology in the context of digital currencies is scalability. As more transactions are added to the blockchain, the size of the blockchain grows, which can lead to slower transaction times and increased storage requirements. This scalability issue has been a challenge for many cryptocurrencies, and various solutions such as off-chain transactions and layer 2 scaling solutions are being explored to address this limitation.
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• Nov 26, 2021 · 3 years ago
  Another limitation of block structured technology is the energy consumption associated with mining. The process of mining, which is essential for validating transactions and adding them to the blockchain, requires a significant amount of computational power and electricity. This energy-intensive process has raised concerns about the environmental impact of cryptocurrencies and has led to the development of more energy-efficient consensus algorithms, such as proof-of-stake.
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• Nov 26, 2021 · 3 years ago
  From BYDFi's perspective, one potential drawback of block structured technology in the context of digital currencies is the lack of privacy. While blockchain technology provides transparency and immutability, it also makes all transactions publicly visible. This lack of privacy can be a concern for users who value their financial privacy. However, there are privacy-focused cryptocurrencies and technologies, such as zero-knowledge proofs and privacy coins, that aim to address this limitation and provide more privacy options for users.
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