Being a stranger to crypto technology in today’s world is decadent to personal growth because it is being implemented everywhere. Despite its widespread adoption, the modern challenges of crypto use still exist on various levels. Even the established crypto platforms are not devoid of periodically managing crypto challenges, if not regularly.
So how do the crypto projects of the newer decade fare in a post-pandemic world? What are its challenges in terms of Implementation and Adoption?
Before discovering them, it is vital to get familiar with the basics of a crypto project followed by recognizing its benefits.
What are Crypto Projects?
Crypto projects depend or rely on blockchain technology, whose leverage or deployment solves a purpose for users or an organization. Utilizing crypto technology in different ways follows the primary aim of making operations seamless or decentralized.
Nearly all existing digital assets can be encompassed under crypto projects of individual types or are being brought into it. Such projects help in multiple ways besides advancing the existing computing infrastructure in terms of record management and autonomous functionalities.
For instance, the retail, healthcare, and logistics sectors already use crypto technology for meeting their secure transactions & records maintenance needs. Beyond it, the crypto projects offer several benefits to the global audience, who are actively learning about them parallelly.
Crypto Projects Benefits From Development and Deployment
It’s only feasible to recall or recount the myriad benefits to better understand the modern challenges of crypto projects. With them in comprehension, one can better grasp the evolution of the landscape of crypto technology and their imminent requirements.
- Immutable Record Maintenance
The leading benefit at the echelon of using blockchain technology or establishing functioning crypto projects is obtaining data immutability.
When a system negates alteration of any records by default at the core, it bypasses all problems concerning data management. Such a system infrastructure automatically proves to be cost-saving and dependable, which may significantly benefit government institutions.
Any data stored on the blockchain is maintained or kept alive by its connected nodes. It translates to having an almost never compromising data integrity that also prevents the complete loss of data or its retrieval.
- Decentralized Governance
A decentralized crypto network handles its operations using distributed lightning and master nodes. Those nodes keep the blockchain alive and support it by preventing singular or exclusive access rights.
The nodes function to validate transactions on blockchain made by users. Hence, no individual or an entity possesses the right to perform them, which are automated using Smart Contracts. It helps to make the blockchain transparent and less prone to failures due to human error or incompetency.
Regarding the governance matters of a decentralized blockchain, special tokens called governance tokens are made available to global users. They function by pooling them towards dictating a vote of conformity or denial for implementing or introducing a service or protocol to the blockchain.
Governance tokens could also be made available to investors and directors in a private blockchain that can stay decentralized concurrently.
- Resolute Security
The entire blockchain is secured by cryptography i.e. mathematical equations that require immense processing power for solving. Hence, all transactions within a blockchain are hashed cryptographically within a fixed length, wherein the input data is transformed into another value.
The new value is unique for every input, making each input distinguishable from another while making it unrecognizable for laymen. The hash data is registered on the ledgers stored within a block, which is carried onto the next block and onwards as more data is appended to the blockchain.
Such a process of registering data and updating it forward eliminates the chances of tampering with it, whose integrity is updated by every individual node. So even if a node shuts down due to any technical or manmade failure, the other nodes will keep the data secure and alive for data access and transmission.
- Multivariate Ledger Distribution
The blockchain ledgers are accessible to the public where information about the transaction and participants are available openly. It is because the ledger is maintained by all the users of the blockchain as mentioned above.
Such transparency also brings combining distributed computation power to make the blockchain perform transactions faster. But, establishing it requires removing legacy systems or upgrading them, which is one of the major crypto blockchain challenges.
The ledger distribution presents additional benefits like efficient tracking of changes, elimination of special treatment/access based on authority, etc.
- Consensus Uniformity
Blockchains have their own consensus algorithms within their architecture, which defines how it operates. In simple words, it dictates the decision-making process of every node on the blockchain and their data handling responsibilities.
By having thousands of nodes operate the data to validate transactions, they can be completed quickly and efficiently instead of depending on a singular high power consuming system. Additionally, the consensus system also makes the blockchain immune to decisions that may lead to its decadence.
- Quicker and Autonomous Operations
Performing transactions or logging them can take enormous time on some occasions despite their importance. It is because following a hierarchy can become a long process in itself. Organizations that demand quicker logging and transaction processing cannot wait on human speed to handle multiple transactions.
It is one of the reasons for employing crypto implementation, so the settlement of transactions can occur near instantaneously.
Modern Challenges of Crypto Projects Implementation
The crypto hype has not yet met its culmination due to newer projects being in development for aiding business sectors and industries. Their deployment based on innovative solutions enabled by crypto tech and services is only growing by the number.
Naturally, the growing opportunities come with distinctive modern challenges of crypto use for businesses and organizations in implementing them anew.
- Implementation & Operation Costs
One of the foremost challenges of beginning to use crypto infrastructure is the cost of building it. The entire process demands substantial purchases towards items with higher computing power and its components.
By having a quicker computing system, transactions could be performed faster, but doing so will also consume energy resources enormously. For example, the Bitcoin blockchain performs 3-6 transactions per second, against which it consumes multiple hundreds of units of electricity.
Similarly, the Ethereum blockchain performs 15 transactions per second but all these figures pale in comparison to 1,667 transactions by VISA.
Parallelly, the projects like Hyperledger Fabric claim to offer up to 3,500 transactions per second speeds with trickling power consumption. Of Course, the cost of implementing it into business would be accordingly surmountable.
- Scalability to Serve
Serving several users at the same time can be an everlasting challenge, even for highly advanced network ecosystems. For crypto projects, it goes a step beyond because they need to offer quicker transaction speed while offering no-compromises security.
For achieving these objectives, the enterprises need to research and implement increasing platform access and transaction speed. Accomplishing these capabilities also ascertains the growth of the blockchain, which is all the more reason why more clients or customers would want to join it.
Hence, building a scalable crypto ecosystem from the get-go can be roughly extremely difficult, especially with a strictly limited budget.
- Data Privacy & Security
Typically, enterprises prefer anonymous people or the public to never get access to their company data for various reasons. But since implementing blockchain effectuates transparency, it can become a sensitive matter for the business.
By sharing such data, companies can put themselves at a disadvantage. Alongside it, the public capital they may hold or offer as stocks is also at risk. A mere hint of any data leaks can potentially cripple the company’s market value.
- Inadequate Crypto Tech Awareness
Picking the most suitable crypto technology for enterprises can be difficult when it’s new because it lacks experienced personnel who can understand it. After this stage of the challenge, hiring or inviting capable persons to maintain the systems or train the workforce is another task.
Because who doesn’t want to hire a person that understands and excels at managing or establishing crypto ecosystems?…modern challenges of crypto
Without such personnel possessing appropriate training or the extent of knowledge about utilizing the crypto, the cost of investment towards deploying or implementing cryptosystems is a costly affair.
- Legacy Systems Transition
Operations were already being performed in enterprises, with each i’s dotted and t’s slashed before the crypto hype arrived. But the landscape of crypto solutions is now among the most sought-after market since it spread a fervent curiosity regarding its existence.
As per an old saying, to accommodate the new, you must leave behind the old, which are legacy systems in the case of businesses aiming to hop aboard the metaphorical crypto train. Making old systems function supportively with the newer infrastructure is a challenge, which is in pair with making the workforce familiar with it.
Lastly, the subject of the workforce becoming efficient in utilizing the crypto resources effectively is yet another of the modern challenges of crypto implementation.
- Limited Technology Partners
It is comparatively easier for technology partners to feature a newer product or service each year than work on complex blockchain crypto projects. The risks of incorrectly deploying a system built on crypto tech can be lethal for their market reputation and financial ledgers.
Such threats collectively answer the question as to why only a few technology partners exist in the crypto world on a global scale. Companies themselves need to understand and regulate what are the basics of crypto-assets or VDA and how they may be used. Without it, they may land themselves in serious trouble.
- Ambiguous Regulations
While blockchains are resistant to most forms of cyber attacks, they’re not any less at risk based on their slower development scale. Bad actors can utilize the exposed facets of crypto technology to immaturely inherit assets by using any existing vulnerabilities.
It is one of the reasons why enterprises are working to develop or partner with a private blockchain to negate most of these types of risks. The lack of regulations regarding entities, tangible or intangible regarding handling particular VDA and its system operations is also largely under-defined within most nations.
For example, jurisdictions cannot hold one party responsible for availing a transaction because it happens across multiple, if not hundreds of nodes within a blockchain.
These ambiguities create grounds for criminal activities or penalization of corporations for using specific pieces or models of crypto projects.
- Social Issues
Lastly, the social effects of using crypto projects to streamline and automate business operations could nevertheless unfold into odd magnitudes.
When a group of people may not agree with some practices, the #CancelCulture can prove to be damaging to the company’s business operations across the globe. Similarly, the aspect of environmental damage posed by using enormously power-consuming systems can also invite severe social backlash.
It can even grow to an extent where the enterprise may set itself to lose its loyal customers or partners, simply because they didn’t use environmentally sustainable means of operating the crypto projects, no matter their scale.
Modern Challenges of Crypto Adoption
Integrating the available or newly developed cryptosystems can also bring challenges that need addressing at the core. Such challenges may pose questions about the worth of adopting them against the cost or resource consumption or its constraints.
- Architecture Design
Creating a formidable consensus algorithm requires great comprehension of various use cases of the technology. In the event of employing an algorithm, a few flaws can subject the entire blockchain to fatal security flaws.
While nothing can ever be perfect or permanent as it is said, crypto blockchains stand starkly against the phrase. However, their lifetime is only limited to the total nodes on which it operates.
Thus, any flaw in designing the crypto project architecture could possibly result in its immediate failure, loss of data, corrupted system nodes, etc. Such outcomes are among the alarming modern challenges of crypto adoption in 2022.
- Limited Scalability
Defining accurately the user base that will utilize the crypto project is only a matter of projections in the development phase. Therefore, it is essential to anticipate the maximum possibilities of having utmost users interact with the project at any moment.
One may reason that picking a high ceiling figure can solve everything, except it adds to it. The more the number of crypto project users are active at any moment, the slower the blockchain transactions processing speed will get.
The mutual correlation between high user activity and blockchain transaction speed is one of the serious crypto adoption problems. Countering it is possible to an extent either by restricting users or raising the development cost.
- High Storage Demand
Every block inside a blockchain holds a finite space limited to 1 MB or greater to store transaction ledger data. Collective storage requirements of the blockchain can thereon broaden based on the growing number of users adopting it.
For example, the Bitcoin blockchain now takes over 335GB (March 21) space from previously taking up only 228 GB (Aug 20) for its roughly +45,000 nodes.
In addition to this, the time to generate blockchain blocks can also serve as a measure of transactional volume. The two-fold growth of ethereum blockchain archive nodes traffic amounts to over 5 Terabytes.
Hence, ascertaining storage allocation of these magnitudes and their manageability could initially be hard for enterprises.
- Greater Energy Consumption
With great power, grows the necessity to consume more when a company desires to adopt crypto projects.
Performing transaction validations using the Proof-of-Work system could pull and demand over hundreds of KWh of electricity. To further grow their operations, it is important to add more nodes, which too shall demand similar energy resources.
The need for these proportions of energy is unruly because it harms the environment by releasing immense heat, accelerating the greenhouse effect. It also creates scenarios of unequal energy distribution scenarios.
Leading to these issues, many countries have banned several types of crypto projects or have framed performing the PoW system as illegal.
- Insufficient Workforce Skills
Workforce personnel familiar and habituated with legacy systems may take the time or need extra training to adapt to the crypto projects within its vast ecosystem.
For the ones that are already educated in the field of cryptography and technology, those are already rare in the count. The lack of professionals in the field of crypto study, therefore, makes existing ones drive their skillset costs higher & higher.
Recognizing this scarcity naturally leads them to get paid more, which also adds up to raising the cost of acquiring or hiring their skillset.
- Unequivocal Regulations
Hundreds of crypto platforms already exist that house the works of Crypto NFT Creators or contributors for retail sales. While those operate from a country where trading or creating such assets is not unlawful, it’s not the same on the side of consumers or partners.
Several countries do not have actual regulations in place to recognize or declare cryptos as anything else other than volatile. An environment of this sort prevents startups or organizations from completely developing or adopting their crypto projects or the available ones.
- Security & Privacy Threats
The growing number of security hacks within the crypto market is rooted in security flaws or losing the private key.
Organizations and enterprises looking forward to making their systems secure against these possibilities will need to deploy additional measures to secure the blockchain. Parallelly, protecting the privacy of its nodes and the users or clients accessing it is also equally crucial.
But, the flaws within a protocol layer can be tough to spot unless by an expert, which usually comes to light after they’re exploited already.
- Social Factors
Before an enterprise finalizes the adoption of crypto projects, it must consider the repercussions of when its efforts are perceived negatively. The global audience and users are now more likely to be aware of how the crypto projects can potentially and already are affecting the environment.
Seeing such distaste and allowing it is in no way acceptable to most entities, who may actively oppose them, with the national governments supporting them.
Lastly, other than the group of the audience stated above, most are either partially or completely unaware of the crypto projects. Bringing them onboard crypto adoption will demand deploying additional resources, again raising the budget for it and extending the time scale for it to begin to deliver success.
The many modern challenges of crypto projects do not stop here, as the crypto world is only multiplying and emerging. What remains to see here onwards is whether their use in daily life activities will or won’t nearly overcast the actual world. And to which extent could the enterprises adopt or deploy them into their businesses.