Blockchain technology relatively new to the tech scene but is practically unknown to the entire world. Think of the transition from the days before internet to today where the majority of people are connected. The initial years of adoption was difficult, bandwidth was slow, onboarding was fairly technical (1200+ baud modems), a bit pricey (cost of the computer), and the difficulty of training users. I think blockchain will have similar issues and then some specifically because the internet has matured and people have become accustomed to certain practices. These practices will be the most difficult hurdle for blockchain to overcome.
Areas I see challenges for blockchain adoption:
First up the most well known issues:
- Speed - transaction times are a bit slower than current counterparts
- Scalability - as seen with the recent ICO, there's some time needed to scale the protocol
- Exploitability - smart contracts that aren't audited properly can wreak havoc
Some not so obvious issues:
- Transaction costs - most services are free because people don't want to pay (newspapers)
- Speed of development - slow because new problems require new solutions
- Changes to the blockchain - hard forks are tough
- Personal data security - people generally want to blame someone else
- Scams - an obvious issue
- Coin/Token Price volatility - no stability means items will cost more or less than you actually intended to pay
Digging a little deeper, we've already seen issues with speed when confirmations for a transaction can take minutes to days to process depending on the blockchain. This causes issues when you don't know if a confirmation has gone through and you send it again, risking a second transaction. I've heard of many stories during recent ICO's where because the network was slow or non-responsive, users repeated the transaction with increased gas or just tried again. This might not be a huge problem but it is something that is a bit annoying vs. today's instant transactions.
Transaction costs is going to be one of the biggest obstacles to adoption. The majority of users today are used to free services. Now they will have to pay for little things here and there. Not only that, it becomes an issue for the developers to find creative ways to package those transaction costs that doesn't bleed funds.
Speed of development, literally everything needs to be rebuilt from scratch to work in a decentralized way. Basic services like image uploading becomes a struggle to combine that with a messaging system. This will eventually get better over time as blockchain technology matures, but will take time to get there. Most users these days just expect things to work the way they are used to. Limiting features may or may not work depending on the audience. Either way, this will slow down development because teams are reinventing the wheel.
The security around where all your data is going becomes a HUGE issue because now your information is everywhere instead of centralized silo's. There are some benefits to centralization just as there are to decentralization. The issue is once you get services that hold a persons identifiable data, who becomes responsible for the security of your data? The answer to that becomes simple. Since blockchain's role is to remove counterparty, the user becomes responsible for their own data. This is fine for early adopters who know what they are getting into, but once you get to the main stream market many users don't want deal with it and if they don't on blockchain, it leaves them vulnerable to possible exploits.
Changes to the blockchain protocol will happen every now and then. Larger centralized companies have problems with migrations, now we're talking the entire chain businesses run on can change. One such upcoming change is Casper to Proof of Stake. These types of changes are not easy nor do they go 100% smoothly. IPV4, is the 4th version of the IP protocol. IPv6 has waited for adoption for years because people can't really move off of IPv4. After a certain point, blockchains will also reach this point. It's already hitting it now, which is one of the reasons they are moving to Proof of Stake among other reasons.
Scamming is really a problem everywhere and happens on the internet, but because of the one way transaction of blockchain scammers are out and about. This is probably one of the biggest reasons people might be turned off. Wallet hacks, scams with people sending in money to wallets, etc. Without a counterparty to guarantee a service, product, or security all the responsibility is on the user. I think this will cause people to stick with their credit cards because it comes at no cost to the buyer as is.
Coin/Token price volatility will also play a part in limiting blockchain adoption. People are not yet accustomed to using fractional 'bits' as dollars and the price swings are too great for both buyers and sellers. When a person buys and the price of the currency swings the user has lost value. Same for the seller if it drops. Though they work inversely for buyer and seller, someone will lose value with wild price swings. I do believe this will be addressed but that would require some sort of governance, which is still not built. Because of this, there will be limits on who will use the currency vs hoard it.
Theres several factors that need to be addressed in order for blockchain to fully mature and it is quite a bit in the future. All this money pouring into the technology is a good start to see where the biggest problems will be as companies build on top of the protocol to find and fix, not just technical issues but also usability and practical issues. Most mainstream users don't care as much about privacy loss as most of the people in the crypto community right now. If they did, we probably would have more privacy. What is worse is that younger people don't know anything of privacy and when they become adults is likely when this technology will mature. I will say I see a bright future for the technology but there's going to be some rocky roads ahead. The euphoria we're seeing in the ICO market will have a rude awakening which is healthy for the space. We need to filter out what's fluff vs. substance. We'll need to find ways to onboard non-technical users easily and quickly. The fact that losing your password or private key kills the account is a double edged sword. Good security, but honestly if people were responsible we would not have a 'forgot your password' on every login page on nearly all websites. For the time being, blockchain will be the playground for those with higher than average risk tolerance and the technically savvy. When that will change to super simple usability, I don't know, but I know we'll get there!