Blockchain has far many advantages in terms of finance-related projects. At the same time, it has disadvantages too. Below is the list of the top four disadvantages.
4 Top Blockchain Disadvantages
- 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 can read the complete history of transactions. This level of transparency is frightening for those who want to protect their privacy.
These concerns are understandable when considering 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 to trust in protocols and technology may lead to a loss of personal service and personal responsibility.
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3: Loss of Jobs
Automation and standardization play a profound cause to lose many jobs. Third parties, such as banks, brokers, custodians, money-transfer agencies, and notaries directly tied to their roles as intermediaries.
All these jobs could be at risk when a sea portion of financial transactions automated by using Blockchain technology.
4: Reintermediation
The complexity and its open legal status discourage individuals and organizations from using Blockchain technology.
If people prefer third-party services instead of using Blockchain technology, it surely hurdles the real usage.
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