4 Top Blockchain Disadvantages Includes Privacy

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Blockchain has a lot of advantages in financial transactions.  In line with those, it has disadvantages too.
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disadvanatges

Top Disadvantages of Blockchain

  • Lack of privacy
  • Loss of personal responsibility
  • Loss of jobs
  • Reintermediation


#1: Lack of Privacy

Public blockchains do not hide any of their data. Instead, everyone is able to read the whole history of transactions. This level of transparency is frightening for those who want to protect their privacy. 

These concerns are understandable when taking into account the level at which personal data are already collected and utilized by large corporations or intelligence agencies.

#2: Loss of Responsibility

  • Loss of personal responsibility is often considered a consequence of disintermediation. 
  • Intermediaries not only bring different parties of a contract together but may also provide guarantees. 
  • They offer reconciliation in cases when transactions do not work out as intended, and they are also obliged to take responsibility for their actions. 
  • The shift from trust in people and human organizations toward trust in protocols and technology may lead to a loss of personal service and personal responsibility.

#3: Loss of Jobs

Automation and standardization have not only shaped the process and the costs of producing goods but also caused friction in the labor market. Many players in the financial industry such as banks, brokers, custodians, money-transfer agencies, and notaries are directly tied to their roles as intermediaries. 

Many jobs in these institutions could be at risk when a huge portion of financial transactions are processed in an automated fashion through the blockchain.

“Be yourself; everyone else is already taken.”
― Oscar Wilde

#4: Reintermediation

The complexity and its open legal status may discourage individual people as well as organizations from using the blockchain, which can cause an effect that counteracts disintermediation. 

Instead of using the blockchain in order to interact with contracting parties directly, people may decide to utilize services offered by intermediaries, which in turn use the blockchain. This effect could seriously slow down the adoption of the blockchain and counteract some of its major accomplishments.

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