Blockchain Has Three Fatal Flaws, But Its Future is Bright, Says Ex-IMF Deputy Zhu Min
“Blockchain has three fatal flaws—insecurity, block size limit, and limited basic applications, but the technology that powers bitcoin still has a promising future. ” said Zhu Min, president of National Institute of Financial Research and a former deputy managing director of the IMF, at the Boao Forum for Asia on Wednesday.
He thought the public need to separate blockchain technology from bitcoin. As the future of technology, blockchain will open a revolutionary window to many industries and allow for infinite possibilities.And the technology’s features of decentralization, privacy, convenience and credibility enable it to achieve wide adoption in the future. Thus Zhu believed blockchain will embrace a bright future.
But there are two sides to every coin. Blockchain industry is in somewhat of a bubble, because the technology is subject to three fatal flaws, and Ethereum blockchain is a good example.
First, insecurity. In fact, there is no security facility available on the Ethereum mining chips.
Second, block size limit. Blockchain’s limited capacity fail to meet the requirements of increasing number of traders, and the mining process will lead to soaring energy consumption. Therefore, this flaw restricts its further expansion and adoption.
Third, the number of Ethereum-based application is very limited and it is difficult to develop complex products on this platform. But, the technological revolution inspired by Ethereum is coming because intel chips can be used as the foundation for blockchain.
“The biggest barrier for blockchain’ s adoption lies in that more people get access to it, the slower blockchain transaction speed will be. Though some solutions have come out to overcome the above-mentioned three difficulties, there is a long way to go before the wide adoption of the technology.” Zhu said.
Besides, he mentioned that blockchain is able to play an important role in many industries, such as financial industry, logistics, and trade financing, because the technology will bring effectiveness, security, convenience and cost-effectiveness for these industries that have relatively specific customers and business needs.
“Bitcoin as an asset will experiences wild price fluctuation, but the technological revolution driven by blockchain will create unlimited innovative space.”Zhu said.