Blockchain Myths And Misconceptions; Debunked!

• Toshendra Kumar Sharma
• December 30, 2018

If we talk about Blockchain then it’s a cryptographically secured ledger which provides a digital distributed ledger platform for the exchange of digital assets. This digital asset could be anything, from information to transactions. This information exchange gets added in the system as Blocks. Every block is stacked upon the other, and thus it is difficult to change or alter the data.

Cryptographically secured, transparent, immutable, faster and time saving distributed ledger technology, that’s what Blockchain is all about. In the last decade, we have seen a whopping rise in the popularity of Blockchain, and we have seen some vast development surrounding it. But as alluring this technology appears, it has its own set of drawbacks which make us rethink about the wide acceptance of this technology. There are various myths surrounding Blockchain technology. In this blog, I will try to break those myths and bring forth the facts about Blockchain. 

Blockchain Myths Busted

 

• The Blockchain is completely immune to cyber attacks

  When it comes to the Blockchain, one of the most common features of benefits that people talk about is that Blockchain offers security and safety of data. Immutability is the key feature of Blockchain which inhibits data alteration and tampering. This has made most of us believe that Blockchain is invulnerable to attack and the data is in a completely safe ecosystem. But, the fact of the matter is that there is no such thing as a completely safe place. Even Blockchain can’t guarantee that the ledger is fully free from hackers attack. However, it is true that it’s safer than the conventional centralized system that we are using but it is not completely safe.<>/p

The reason it is safer than other system is that while a transaction is being processed in the network, then a broadcast is made to all the nodes. All the participating nodes verify the transaction by solving a complex set of algorithms. So, a person who tries to hack or alter the system needs to break through thousands of computers involved in solving the algorithm, thus making it an impossible task for the hacker. And hence, Blockchain becomes a safer environment.

• The Blockchain is a single entity

  There is a popular belief that Blockchain is a single entity. It has its independent existence like the internet. But, the fact of the matter is that there are a number of Blockchains which are being created for a specific purpose. For example, Ethereum, Litecoin is public Blcokchains where anyone can participate. It’s a system open for participation. On the other hand, federated network like EWF for energy, E3 for banks are private Blockchain which allows only a limited number of nodes to participate. The nodes need permission for participation and validating the transaction.

 

• The Blockchain is for database storage

  This is a popular myth surrounding Blockchain. Many believe that Blockchain is a place for database storage. It is true that this technology is a DLT or Distributed Ledger Technology where all the information is stored in the form of the ledger and is time-stamped, making it easy for the participant or the customer to track and trace the data but that certainly doesn’t mean that Blockchain is only for data storage. It is one of the features that Blockchain has to offer.

 

 

• The Blockchain is a huge database in the cloud

  It is important to know that Blockchain comes with append-only properties. And hence once the entry gets into the ledger it becomes unchangeable. You cannot delete it. The files in the system keep on growing and get replicated in the P2P network. Although it’s a place where information gets stores it doesn’t allow storing of any physical information like the image.

 

• Blockchain’s application is only restricted to Fintech sector

  Many people believe that Blockchain’s use cases are limited only to Fintech industry. Since Blockchain evolved after Bitcoin that brought in the concept of digital currency, many believe that Blockchain can only find application in financial transactions. However, over a period of time, the myth broke, and today we see myriads of use cases of Blockchain technology that starts from healthcare, supply chain, retail, etc.

 

 

• Blockchain is Bitcoin 

  Since the time Bitcoin evolved, Blockchain also came into existence. It won’t be wrong to say that Blockchain forms the heart of Bitcoin and aids its exchange, but an important point to note here is that Blockchain is the underlying technology of Bitcoin and not Bitcoin itself.

 

 

Blockchain continues to evolve and has given us a hope to formulate a new ecosystem of work. However, Blockchain when works together with IoT and AI then it becomes even more powerful and efficient and that’s what the companies like Amazon, Siemens, IBM, Wallmart, Microsoft are eyeing at.