Misconceptions About Blockchain
For the past few years, blockchain has been a famous phrase. However, it has been linked to several myths, much as other technologies. The blockchain is a distributed ledger that publicly records all transactions in the specified sequence. The complete database is shared via a network, not contained in a single ledger.
The technology is relatively recent. To identify uses for this technology, strategists, planners, and decision-makers have begun to pay attention to it. It's crucial to dispel myths about this emerging technology since many of us distance ourselves from it. Here are some blockchain myths that we will debunk one at a time.
Misconceptions about Blockchain
The following are the most popular misconceptions about blockchain:
It is a magical database on the cloud
Users cannot keep any tangible data, like a word file, on the blockchain. It only offers its consumers "proof-of-existence." The distributed ledger does not store the document itself; rather, it just has a code that certifies the presence of a particular document.
The files are kept in the data lakes, nevertheless. Access to the information is within the owner's control. So, in theory, a blockchain is just a collection of transactional data. The affix list ensures that the files expand endlessly and replicate in the peer network while helping to prevent the deletion of data.
Businesses do not want to adopt the Blockchain
There is a well-known misconception that blockchain has several faults. The performance, security, and privacy issues are what prevent enterprises from implementing them. This is not the case, though. Industry-specific blockchain consortiums have become increasingly important over the past few years. It has provided businesses with knowledge while establishing standards for network performance.
According to Deloitte's 2018 Global Blockchain Survey, 29% of the corporate community is embracing blockchain. In addition, 45% expect to do so in the future year, while 13% of respondents said they will begin their consortia. It shows that organisations all across the world are eager to adopt blockchain technology and are seeking to capitalise on its advantages.
All Blockchains are public
It is a typical notion that has emerged since the introduction of a public blockchain that is well-known across the world, like Bitcoin. However, this is one of the most widespread blockchain myths that may astound any novice. In reality, there are several types of blockchains besides public ones. In this network, both hybrid and private blockchains are active.
This spectacle across several private businesses and financial organisations is the result of the development of Bitcoin. It is also referred to as federated blockchains, private blockchains, and permissioned blockchains. Many ledgers in their corporation are open to the public. However, permissioned blockchains are private, shattering this false notion.
Blockchain and cryptocurrencies are the same
It may be the blockchain misconception that gets spread the most. Blockchain and the use of the term exchange are the first things that people think of when they hear about cryptocurrencies. The digital money used as a medium of trade, similar to the dollar or the pound, is called cryptocurrency. Blockchain, on the other hand, covers a wider range of technologies.
Other applications do exist, though. Identity verification, supply chain management, and support for the healthcare and insurance industries are all included. As a result, Bitcoin uses blockchain technology to purchase and trade digital currency, and Bitcoin supports the blockchain in return. Much more than only Bitcoin is used using blockchain technology.
The legal value of smart contracts is equal to standard contracts
Smart contracts are bits of code that carry out operations as soon as particular criteria are met. Thus, from a legal standpoint, they are distinct from a typical contract. Nevertheless, it is used as proof or to guarantee the completion of a certain work. Despite their legal significance, smart contracts are effective tools when used in conjunction with the Internet of Things (IoT).
We now have a better understanding of blockchain because we have addressed all of the common misunderstandings about it. With thorough investigation, one may further detail its benefits, flaws, and characteristics. This technology has reached the pinnacle of success while being less than half a decade old. The individual who wants to profit from it must look at it objectively and without prejudice.
