Secured transactions, anonymity, real-time ledger, low cost record maintenance, etc, you must have heard about such terminologies while reading/learning about blockchain. Just like internet, it is free and open and everyone in the chain can see the detail of each record. Blockchain is offering multiple application but there are multiple blockchain myths you might've heard about. Here we will try to clear such misconceptions and everything blockchain is not!
Blockchain was introduced in year 2008 as Bitcoin, which tricked people into thinking that finance is the only use for Blockchain, which is the biggest blockchain myth out of other blockchain myths. Rather, blockchain can offer infinite applications. This technology is spreading its roots in various sectors including healthcare, education and agriculture, which can turn every sector digital and transparent. “Smart contracts” are another trend in blockchain which has the potential to deliver instantaneous transactions between consumers and vendors.
Sure, it offers the transparency but it doesn’t mean all blockchains are public. Public blockchains have no centralized controls. But firms/organizations can opt for private blockchains also. This person or group can make deletions that cannot be made in a public blockchain. Anyone can set up a private blockchain among a specific group of people. But activities of private blockchains are not completely private as they can also be traced. The fact that it is operated over a public ledger makes it traceable to other parties or even the government clear another misconception about blockchain myths.
No trust required?
Yes, it is true that blockchain don’t require trusted third parties and users appreciate not having third-party oversight. But it raises the issue for group of users to collude to disrupt information. It’s possible that a group could prevent this step from happening. Trust in the process and in strangers allows blockchains to work.
If you think that blockchain is a lightweight technology than you’re mistaken here. In fact, in early years, general computers couldn’t even process bitcoin. But today, using computers and older graphics processing units, GPUs, for mining is more wasteful of energy than the amount of money created. For meeting the increasing need for computing power and energy ASIC were introduced to keep up with the pace of increasing size of blockchains.
Legally binding smart contracts
Smart contracts are new buzz in the town as it enables agreement to bypass any third parties while conduction of transactions. But as it has “contract” in its name, users often mistake it with the legal documents. No they’re not legal documents and definitely not similar to the real life legal binding contracts.
So now I believe I have cleared all the misconceptions you might be having about blockchain technology, I hope you’re now able to make better decisions about investing and using this technology.