Misconceptions About Blockchain You Shouldn’t Pay Attention
In the past few years, there’s so much as been said about the Bitcoin, Ethereum, Cryptocurrency, and Blockchain. The blockchain industry is moving fast; it’s unstoppable and unpredictable. There are so many things going on at once. And we are still wondering the spectrum of Blockchain and players involved. Furthermore, in the world of digital media and cryptocurrency, there is a trend of phenomenalism, which makes understanding of important issues difficult for some people. That is when the misconceptions spawn up. These views are stands by the general public, but sometimes it goes way too far. Here are a few misconceptions about blockchain.
Many people don’t know or hold an utter misconception about it, where they make baseless comments like Blockchain is used for criminal activities or Blockchain is not safe. If you are new in Blockchain, you are probably wondering whether these rumors are true.
Well, here in this article we are going to break down ten biggest misconceptions about Blockchain Industry.
- There is only one blockchain: What general public is not aware that there are many different technologies that carry the name of Blockchain. They might come in public, semi-private or private variations. Most of these programmed as open or closed source and used for general to specific purposes.
The misconception takes place because the common denominator is these technologies are shared by crypto. They have some and maintain a harmonious mechanism. Bitcoins blockchain, Ethereum, Hyperledger, Corda, and IBM also the Microsoft’s blockchain, all have distributed ledger technologies.
- Blockchain is only for the finance sector: While the debut time, Blockchain created waves in the finance industry. One reason for that would be its first application in the Bitcoin cryptocurrency. Although after a while, we observed different application areas of Blockchain, finance is deniably evident among them. Outside the finance sector, Blockchain can be applied in real estate, healthcare, and even in the education sector. Besides, Blockchain can be used for personal purpose as well, to form a digital identity. Also, individuals can utilize Blockchain for many other uses, such as keeping proof of medical data. It will also help you to get pharmaceutical exchanges from the companies.
- Blockchain and Bitcoin is the same thing: We know that Bitcoin is the most significant utilization of Blockchain. So many people get confused if the two things are the same. To clear out the confusion, we could explain that Bitcoin is a peer to peer payment technology which uses the distributed ledger called Blockchain for the network. Therefore, these transaction histories are saved in each block, which is connected with the previous blocks thus creating a chain. Every block holds the complete record with all the time information about the transaction that happened in the network. The blockchain technology is a fully transparent and permanent program; no one ever can change or remove any record from it.
However, Bitcoin is a cryptocurrency that is used for digital peer to peer payment; in this process, no third party like the bank is not involved. Bitcoins are stored in digital wallets owned by individuals.
- Smart contracts as fair value: The Blockchain has amazing utilities; smart contracts are one of them. It is a digital contact that is stored in the ledger and shared between the peers securely. It consists of all the information any regular contract should have, once the conditions are met and agreements are agreed, that contact can stay enact and neutral to avoid any future mishaps. However, many people have this misconception that smart contacts have legal value. Although smart contracts are beneficial when combined with the Internet of things (IoT) but sadly, it doesn’t have any legal value yet. Maybe in the future, we can expect the possibility.
- Blockchain is just a storage mechanism: Another misconception about Blockchain that has widely spread that it is a storage system. Many naïve people seem to think it works like a cloud, which is an online storage system. In defense, Blockchain undeniably store data, but it cannot store any physical data such as word or pdf files; instead, it can provide the existence proof of the information. It uses various codes to certify the existence of the data.
- Blockchain is for criminals: The most bizarre misconception about Blockchain is that it has an association with criminality. Maybe the decentralization and anonymity can be useful features for criminals. But a lot of you don’t know that most of the public Blockchain is easily traceable. Also, it has some incredible features which help to track any illicit activity on the ledger. Most of the Blockchain offers pseudonymity to help citizens have secure transaction experience in an economically and politically unstable environment. If you can trust banks for your money with all the corruption, Arguably Blockchain will be one of the best transparent solutions to keep your money.
- All blockchains are public: Most well-known blockchains are indeed open to the public for good. The accessibility and transparency may vary and can be semi-private or private. On the public Blockchain, everyone can see all the transactions, and anyone can participate at any level of the consensus process. However, in the private Blockchain, the participation is limited by the parties, but with necessary codes, they can enter the transaction.
- Blockchain is going to end the Fiat economy: The most unique feature of this revolutionary technology is that it eliminates the financial intermediates. This certainly has opened the door to the new global economy. That makes many people worried this might reduce traditional currency usage. Which may be at some point can be accurate in the future. But not anytime soon.
- Tokens and coins are the same things: Many people not related to Blockchain don’t know that tokens and coins aren’t serving the purpose. In the crypto, world tokens stand for store complex level value like property, utility. And coins as only one utility that is used as currency. Also, symbols can capture loyalty points and mostly used in significant investments such as real estate transactions.
Blockchain is not reliable: Last but not least the most common myth about Blockchain is that it is not secure or dependable. But in actuality, Blockchain is created to make money transfer more confident than ever, and for that, the technology consists of numerous features to assure that. Blockchain creates a peer to peer ledger connection so that the transaction information stays in between only the parties.
These are the misconceptions about blockchain you shouldn’t pay attention.