Top Blockchain Myths Debunked

by Himanshu Goyal Operational Manager

Blockchain is the technology that powers cryptocurrencies like Bitcoin. It's a distributed database – a series of records or transactions grouped in a chain with a timestamp secured using cryptography. Each block in a blockchain is a file that contains a list of documents and their corresponding digital signatures. When a block is added to the chain, it's connected to the previous block on the chain by a timestamp.

Blockchain makes it easier for people to trade, store, and exchange assets. In essence, it provides a way to create an immutable, distributed, and transparent record of transactions between two or more parties. The most common type of Blockchain is the public, permissionless, distributed database known as the Blockchain.

Top Myths about Blockchain

A blockchain is a decentralized, distributed, and tamper-proof ledger that records transactions across a peer-to-peer network. It is also a way of tracking all the transactions made using a public and immutable ledger.

The biggest misconception about Blockchain is that it is a new technology. The truth is, it is a revolution that has been around for thousands of years. It is simply the first time it has been in the mainstream.

It is not secure because it is decentralized. It is not safe because it is not private. Because it is not safe, it cannot be implemented globally. It is impossible to have the right amount of security for Blockchain.

Let's debunk all of them!!

A blockchain is a place of Illicit Activity

One of the oldest and, unfortunately, most pervasive myths about Blockchain is that it is most commonly (or perhaps most effectively) used for illicit activity.

This is a commonly held belief, but research suggests it's simply not true. It is a myth that Blockchain is used primarily for illicit activities or a haven for money laundering or illegal drug transactions. They can indeed be used for such things, but they are not the primary way to use them. The majority of transactions within a blockchain are to transfer value or a reward, so it's not true that there is a large percentage of illicit activity within this, even if people are trying to launder money.

Blockchain's Only Application Is Cryptocurrency

It is essential to mention that there are other applications of this technology. For example, the Blockchain is used in different industries such as finance, healthcare, and energy; however, these are far more niche applications.

Blockchain is also a way of tracking funds and records securely. It is often associated with cryptocurrency. However, it is more valuable than that.

Cryptocurrencies like BitCoin, ModiCoin, Etherium are just one of the use cases for Blockchain. There are many other applications in other fields such as banking, medicine, energy, etc. The technology is a more general solution for record-keeping and is often used for financial transactions. For example, the technology has been used for identity management, voting, government, and healthcare.

Blockchain Equals Bitcoin

Bitcoin is a cryptocurrency, and Blockchain is a technology. Although they are both used for the same purpose, Bitcoin and blockchain technology are two entirely different things and should be discussed separately.

Bitcoin is an example of a cryptocurrency. It is a decentralized, peer-to-peer digital currency that any central bank does not back.

Bitcoin was the first Blockchain-based cryptocurrency. From the first coin created on January 3, 2009, to October 31, 2017, the Bitcoin network has produced approximately 14.2 million Bitcoins, making it one of the more successful cryptocurrencies.

There are many different blockchain technologies. Some of these are Bitcoin, Ethereum, and Hyperledger. Blockchain is not Bitcoin. Blockchain is an independent technology that can be used with other technologies.

Blockchain is not reliable because it is volatile

Cryptocurrencies are subject to volatility as they are at the whim of the market. If the market perceives that a particular cryptocurrency will take off, then its price will skyrocket. The volatility of cryptocurrency is not due to Blockchain, but rather because every Blockchain uses a different type of cryptocurrency.

Cryptocurrencies are not volatile. When people buy and sell them, they do so in exchange for money. Because it is a cryptocurrency, its value is dependent on being able to purchase it for a future deal. Because of this, it is essential to know that cryptocurrency is not a volatile currency but a reliable one.

Blockchain, bitcoin, and distributed ledgers are the same thing

The Blockchain is a distributed ledger of transactions that allows anyone with a computer to access, verify, and use data that others have put there. Bitcoin is a digital currency that works with the Blockchain.

The Blockchain, bitcoin, and distributed ledgers are all related but different. Bitcoin uses the Blockchain, and the Blockchain uses distributed or decentralized ledgers.

All blockchains are open

Some blockchains are open and based on permission formats. The main difference is that permission blockchains have a defined set of entities to access the Blockchain. This is often used in a permission Blockchain to ensure that critical nodes can only operate if the network signs them off.

Conclusion

The decentralized, transparent nature of the Blockchain makes it an ideal technology for recording transactions. The transactions themselves – purchases, payments, contracts, etc. – are all recorded on the chain in a transparent, easily verifiable way. The decentralized nature of the chain makes it immune to the threat of censorship since anyone can view the transaction history of any address or account.

But that does not add up that Blockchain does not have any flaws. It sure has the potential to revolutionize commerce and other sectors that will drive positive change for society.

But we also need to remember that Blockchain is vulnerable to hacking as it has many of the same weaknesses as any other computer system. The biggest issue with this technology is scalability. Although it can handle 100,000 transactions per second, that is still very much in the realms of pure speculation.