Blockchain is designed to decentralize transactions which are recorded to a public ledger visible to everyone, where the market for this new technology is expected to be worth $2.3 billion by 2021. The promise of blockchain is to provide anonymity, security, privacy and transparency to all users.
However, the positive characteristics lead to various technical challenges and limitations that need to be researched and addressed. A recent paper by Yli-Huumo et al. uses a systematic mapping study to find relevant material within scientific databases to examine research undertaken so far on the technical challenges facing the blockchain.
After searching through numerous papers, a selection of 41 were chosen to examine further, with all of the publication dates after 2012. Researchers discovered out of the selected papers on the blockchain, two papers (five percent) were published in 2013, 16 papers (39 percent) in 2014 and 23 papers (56 percent) in 2015; this is not surprising considering the fairly recent conception of this innovation, with a growing interest evidenced by the increasing number of publications over the years.
Scant Research on Topics Other Than Security and Energy Efficiency
Security was found to be a substantial factor in creating the challenges and limits faced in the blockchain and bitcoin. Security issues were noted in 14 of the 41 selected papers. When taking a closer look at security, major trends that were recognized as well as security incidents were 51 percent attacks, data malleability issues, and authentication and cryptography problems.
Blockchain technology is created with the notion that authentic nodes control the network. However, the network is susceptible to 51 percent attacks. This is likely to happen if the attacker node jointly controls more computational power than the good ones.
One interesting finding contained in the study is that whilst Bitcoin is intended to be a fully decentralized network, it is faced with increased elements of centralization from 2011 (0.26) to 2014 (0.33), with the spectrum ranging from 0 as fully decentralized to 1 as fully centralized, increasing the risk of a so-called 51 percent attack. Also, over 60 percent of large mining pools have experienced Distributed Denial of Service (DDoS) attacks in comparison to 17 percent of small pools.
There have been some authentication and cryptography problems experienced with the use of bitcoin, especially surrounding private key management, where a private key verifies your ownership of cryptocurrency. The examples of Bitfinex and Mt. Gox, where their storage of customer's private keys was insufficient to prevent thefts, has motivated research to strengthen the verification of Bitcoin.
The study notes that Bos et al. claims that the use of elliptic curve cryptography when obtaining bitcoin addresses to users is insufficient due to the lack of randomness necessary, providing an avenue for further research to improve the Bitcoin protocol. To solve this problem, Bamert et al. recommended the use of the 'BlueWallet,' a hardware token, which operates by via Bluetooth Low Energy to secure and sign bitcoin transactions.
The researchers recognized a number of papers were associated with the waste of resources issue associated with Bitcoin. High amounts of energy are essential for the process of mining bitcoin in order to verify transactions. Conversely, it is important to reduce the number of wasted resources by seeking to improve the efficiency of mining and Proof of Work.
A paper by Wang and Lui is highlighted as one project that proposes an economic model to solve the problem of wasting resources through mining bitcoin. In this model, high economic returns are accrued in consideration of the use of mining hardware with high computation over power efficiency and electricity price. The study also touches upon a method to achieve higher speeds of mining bitcoin. This involves the simultaneous use of CPUs and GPUs in each machine in the mining pool. A key result was that standard hardware miners could boost the overall hash rate in a large mining pool.
A significant amount of research is focused on security and privacy issues in the blockchain. Other research identifying the challenges and barriers of bitcoin, such as wasted resources and usability, was rather limited. Some research was found on computational power and wasted resources in bitcoin mining and suggested improvements of usability.
However, more papers that focused on security and privacy issues were found as compared to wasted resources and usability. Further research is required in computational power, as it is a key characteristic of blockchain technology, as well as the new idea of Proof of Work, to ensure its capability to work on a larger scale.
Intriguingly, they found very few studies relating to the challenges and limitations in latency, size and bandwidth, throughput, versioning, hard forks, and multiple chains. There is scope for further research to be conducted concerning these areas, especially latency, and size, which is needed for the number and speed of bitcoin transactions to increase to match or exceed that of Visa transactions.
Avenues for Further Research on the Blockchain
Research revealed aside from the Bitcoin environment, most studies concentrated on smart contracts and other cryptocurrencies. However, 80.5 percent of the selected papers were conducted in a Bitcoin environment and the study suggests further research should concentrate on cryptocurrency systems. Bitcoin mixing applications that provide support for the network to become more secure by solidifying privacy features, such as CoinParty and CoinShuffle, are expected to increase in popularity in the near future, taking into account security and privacy are the key characteristics of a decentralized transaction environment.
The study then goes on to highlight a few prototype applications established for using the blockchain in different settings. For example, IoT, smart contracts, smart property, digital content, Botnet, and P2P broadcast protocols, demonstrating its multidimensional aspect. Ultimately, research will become more interesting as the concept of a public ledger in decentralized settings can be applied to a variety of applications in different industries.
Some avenues for further research discovered by the study include:
- Usability: Another area suggested for future research is usability, focused on using bitcoin API, which allows developers to build applications and software. This has the potential to create more applications and solutions for the bitcoin environment.
- Beyond cryptocurrency: Current research has been mostly conducted in the Bitcoin environment rather than blockchain applications. For example, further research can be conducted on smart contacts aside from cryptocurrencies. Similarly, the blockchain was initially introduced in a cryptocurrency environment and the same concept can be applied to various other industries, allowing scope for progression of blockchain applications and transactions.
- Lack of attention from high-quality journals: Another recommendation the study proposes is an increase the number of high-quality journal publications concentrating on the blockchain.
The research highlights the prospect for blockchain technology to revolutionize the way in which firms sell their products. Whilst a few of the papers in the mapping study shed some light on the possibility of the use of smart contracts, licensing, IoT, and smart properties in the blockchain context, the authors anticipate these areas will have a significant impact on the future of blockchain technology.
Furthermore, scalability issues such as performance and latency need to be addressed to bring this technology mainstream.
Finally, although solutions have been proposed to the various challenges mentioned previously, the study advises the use of objective evaluation criteria to evaluate proposals, as many are just brief ideas with little to no evidence to back them up.