We’ve read and watched enough about blockchain and its potential applications in a variety of sectors, particularly finance. However, given the size and history of existing financial institutions, implementing the blockchain would not be easy. The impact of blockchain technology is comparable to that of the internet. After the internet, it is dubbed the “next big thing.” Its goal was to make transactions easier and quicker without relying on a central authority. It is less expensive, safer, and more transparent. To safeguard all of the data from potential breaches, and to receive and send bitcoins, a wallet is utilized.
The following are the obstacles that must be overcome before Blockchain technology and secure Bitcoin wallet may be implemented in the banking industry.
Scalability:
In the financial business, Blockchain Technology is becoming a hot topic. Blockchain technology cannot handle the volume of banking transactions that occur daily. Because each transaction must be validated by several nodes. Even the most popular blockchain networks have experienced slowed transaction speeds and higher transaction fees. As a result, further study is needed before the blockchain is widely utilized.
Security:
Blockchain provides security advantages due to the lack of a central authority. Because the ledger is public, no one can make changes to it in secret. Each node checks the entry into the register in the case of a modification to the ledger. Although, in the event of a 51% attack, security vulnerabilities may arise. It is a 51 percent attack, according to Satoshi Nakamoto, when a person or a group holds more than 50 percent of the mining power. Other miners are unable to create blocks or make any transactions as a result of this attack. To prevent this, the mining pool must be constantly monitored.
Culture:
Blockchain technology is an unconventional asset transaction idea. It is possible to have a ‘new world’ experience. When someone is introduced to a new culture, they are going to experience culture shock. Even for digital institutes, it is not as simple to adapt. It requires time, effort, and exceptional knowledge transfer to succeed.
Rules and Governance:
A collection of laws and regulations underpins governance. However, there are no uniform standards or laws in place for blockchain. The rules differ from nation to country.
Cost and efficiency:
Blockchain technology is quite good at lowering costs. However, it still confronts unique hurdles when it comes to adopting ancient systems. It is costly to set up the basic blockchain infrastructure. Small financial firms or banks would not want to invest in anything that does not appear to have a bright future. Many additional aspects, such as scalability, contribute to the high cost of maintenance. These issues must be solved for any organization to progress in the future.
Though the Blockchain’s future concerning Bitcoin wallets has a lot of promise, if the difficulties outlined above aren’t addressed, very little will happen. With an unknown future ahead of us, a unified front across all countries and a set of standardized legislation will be critical to fully integrating these technologies.