The major limitations of blockchain are:

Lack of Technical Talent

Today, there are a lot of developers available who can do a lot of different things in every field. But in the blockchain technology, there are not so many developers available who have specialized expertise in blockchain technology. Hence, the lack of developers is a hindrance to developing anything on the blockchain.

Network Size

Blockchains require a vast network of users. Therefore it is not much resistant to the wrong action as well as it responds to attacks and grows stronger. The blockchain is a robust network with a widely distributed grid of nodes, which makes it more difficult to reap the full benefit.

Security Flaw

Bitcoin and other blockchains are associated with one considerable security flaw known as a “51% attack.” This security flaw refers to a situation when a group of “miners” takes control of more than half of the blockchain network’s computing power. If the miners somehow acquire sufficient computational power, then there is no centralized authority to prevent them from influencing the entire Bitcoin network. It means the attacker can block new transactions from taking place or being confirmed. They are also able to reverse the transactions that have already validated during that same period. Due to this, they could spend coins twice.

For this reason, Bitcoin mining pools are closely monitored by the community who ensure that no one gains such network influence.

Speed and cost of transactions

The first few years of the existence of blockchain, transactions cost are “nearly free.” But as the network grows, it will NOT be the most cost-effective option of transferring money due to rising transaction costs in the network. From the end of 2016, it processes only seven transactions per second, and each transaction costs around 0.20$.

Consensus Mechanism

In the blockchain, we know that a block can be created in every 10 minutes. It is because every transaction made must ensure that every block in the blockchain network must reach a common consensus. Depending on the network size and the number of blocks or nodes involved in a blockchain, the back-and-forth communications involved to attain a consensus can consume a considerable amount of time and resources.

Blockchain technology has various advantages, but it also comes with its own set of limitations. Some of the common limitations of blockchain include:

Scalability: One major limitation of blockchain is scalability. As the number of transactions increases, the size of the blockchain grows, and the time taken to validate transactions and reach consensus can increase. This can lead to slower transaction processing times and increased costs.
Energy Consumption: Proof-of-work (PoW) consensus algorithms, used by some blockchains like Bitcoin and Ethereum, require significant computational power and energy consumption. This has raised concerns about the environmental impact of blockchain networks.
Storage and Bandwidth: Storing a copy of the entire blockchain on every node in the network can require a considerable amount of storage space. Similarly, transmitting and validating large blocks of data can strain network bandwidth.
Interoperability: There is a lack of standardization and interoperability between different blockchain platforms. This can hinder the seamless transfer of assets and data between different blockchain networks.
Privacy Concerns: While blockchain provides transparency and immutability, it also poses challenges in terms of privacy. All transactions on a blockchain are visible to participants, and ensuring privacy can be challenging, especially in public blockchains.
Smart Contract Security: Smart contracts, which execute automatically when predefined conditions are met, can have vulnerabilities. If not properly coded or audited, smart contracts may be prone to exploitation, leading to security breaches and financial losses.
Regulatory Uncertainty: The regulatory environment for blockchain and cryptocurrencies is still evolving. Uncertainty about legal frameworks and regulatory compliance can impact the adoption of blockchain technology.
Lost Private Keys: The security of blockchain relies heavily on cryptographic keys. If a user loses access to their private key, they may lose control over their assets permanently.

It’s important to note that ongoing research and development in the blockchain space aim to address some of these limitations and improve the overall functionality and efficiency of blockchain technology. Different blockchain networks may also have varying degrees of susceptibility to these limitations depending on their design and consensus mechanisms.