Navigating Blockchain’s Twin Challenges: Scalability and Regulatory Compliance

Abstract

Blockchain technology promises transformative potential across diverse sectors, facilitating innovations in areas ranging from finance to healthcare. Despite its many promising applications, several barriers—including scalability challenges, regulatory complexities, and technical hurdles—limit its widespread adoption. This systematic literature review delves into scalability enhancements and explores the legal and regulatory landscapes impacting blockchain deployment in ten key sectors: IoT, healthcare, finance, education, social media, genomics, supply chain, vehicular networks, e-voting, and tourism. These sectors were selected based on their significant engagement with blockchain technology and their prominence in the analyzed literature. We examine key technological advancements such as Layer-2 techniques, sharding, consensus algorithm optimization, and rollups, and discuss their implications for throughput, latency, and compliance with regulatory standards such as the General Data Protection Regulation (GDPR). The review details these technological and regulatory developments and discusses their broader implications for industry and academia, emphasizing the need for interdisciplinary research and innovation. By identifying gaps in current research and suggesting future directions, this study serves as a roadmap for researchers, practitioners, and policymakers to develop secure, scalable, and compliant blockchain systems. Our comprehensive examination provides valuable insights into enhancing the efficiency, security, and regulatory compliance of blockchain technology.