These days everyone is talking about blockchain. You can even hear your grandparents discussing it. But what is that hype all about? You can hear practically everyone talking like an expert but the truth is, most of the time people are just talking with little understanding of the topic.
These days everyone is talking about blockchain. You can even hear your grandparents discussing it. But what is that hype all about? You can hear practically everyone talking like an expert but the truth is, most of the time people are just talking with little understanding of the topic. Despite its popularity and despite making it to the headlines, the technology is surrounded by rumors that are actually far from the truth. Here is a list of the craziest myths circulating the internet.
There is only one blockchain
It does in fact sound at times like people are talking about a singular program that solves practically everything in today’s world. Well, it is not like that. Blockchain is the technology and each team of programmers can develop its own version of this technology. Simple 🙂
Blockchain = Money
Yes, it underpins cryptocurrencies but blockchain has much more applications than just transacting money. Think of smart contracts, digital identity, voting, storage, etc. The system itself is equally good despite what is running on top of it. Perhaps many people relate it to money mainly because cryptocurrencies made it famous.
In fact, blockchain’s first application was to run Bitcoin the two are not interchangeable. Blockchain is the technology, Bitcoin is the cryptocurrency. Think of Xerox, it is the name of the brand, not the machine.
Blockchain is incorruptible
Despite that blockchain is spread across many computers and is indeed difficult to compromise, as any other thing created by human beings it can be hacked. Anything connected to the internet is prone to hacking. The sooner the community understands that, the better. Even decentralized tokens exchanges have fallen victims to hackers – remember DAO, Bitfinex, or EtherDelta? After all, what happens when the majority of nodes are corrupted? It is hard to do this but it is not impossible.
It is cheap
Well, it is not. Bitcoin mining itself consumes so much energy that mining companies are constantly relocating to regions where electricity is cheaper than usual. Until that changes it is simply dumb to say blockchain is the future of (put whatever you like here). Yes, transacting money via blockchain can be cheap but running the system is not.
Only big players can use blockchains
Wrong. Many blockchain networks are open-source, meaning any developer who has the skills can modify the code and create whatever he needs. Moreover, many projects aim to satisfy the needs of certain small communities – Ascribe, Genecoin and Filament are good examples.
Blockchains are public
Ethereum, Bitcoin, and Litecoin are but many others aren’t. Some projects are targeting only one company and we do not even know about their existence. Not every blockchain is open-source, some are trademarked, and central banks and governments use others. So no, blockchain is not driving us towards no-state society.
Blockchain is culprit’s heaven
Skeptics always say that only criminals use blockchain and while there is some truth it is not completely like that. We agree that most Dark Web merchants accept cryptocurrencies but this shouldn’t make us think that distributed ledgers are something bad. They have many applications in healthcare and science as well. Should we assume blockchain a criminal’s tool then?
Smart contracts have legal value
Simply said, smart contracts perform certain things when certain conditions are met. Nothing more than that. When parties agree over the conditions of a smart contract they do not automatically become legally bonded. However, smart contracts can be used to prove that certain conditions have been met.
Your privacy is at risk
Some might say that since tens or hundreds of computers store all the information, everyone has access to your private data. In fact, the only thing that is visible is the number of tokens transacted. This is nothing compared to what information your bank has about you – telephones, addresses, ID and practically everything in between.
If you can think of other myths related to blockchain technologies, please share them in the comments.