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Blockchain and cryptocurrency are the hottest terms on the internet for quite a while now. Blockchain has been the talk of the tech industry this year and is definitely the next disruptive aspect in technology. It is a mechanism that lets participants make sure they are looking at the exact information.
Already, thousands of projects have taken their first steps in implementing blockchain. Moreover, analysts in the industry are discovering new ways how blockchain will reshape the online security. But it is in the nascent stage and is changing rapidly. And, a lot of people involved in this space don’t understand this technology very well. As a result, there are several misconceptions related to the blockchain.
So, we are here to clear seven common myths that evolve related to this technology.
#1 There’s only one blockchain
A common misconception is that people think that there is only one blockchain. On the contrary, there are different forms of the blockchain. There are open and closed-source blockchain technologies. And, not all blockchains are absolutely secure and can be tampered easily. Some projects have their own blockchain as it is easy to create one but the tough task is to get a lot of adoption. Many projects use the existing blockchain technologies as they have strong adoption.
#2 Blockchain can’t be hacked
There are claims that Bitcoin, a blockchain protocol has never been hacked since it was launched in 2009. As blockchain is claimed to bring in transparency, people assume that it is invulnerable to attacks. However, one has to know that no database or system can be completely secure and so is blockchain technology.
#3 Only a few people can control it
Cryptocurrency mining is a process in which transactions of different forms are verified and added to the blockchain digital ledger. As it is a highly competitive space, several people group together in mining pools in order to earn a steady income and reduce financial risks. People assume that only one person can use it for malicious purposes. But in reality, a group is made of many individuals who can switch their alignment at any time.
#4 Everyone can access everything
When you people hear that blockchain is a shared database, they believe that everyone can put anything in it and remove whatever they want. Eventually, it is believed that the same can be used for bad activities. In a blockchain, data once stored is permanent, so one has to think well why they store the data in there. Everyone will have their own databases and not all will get access to it. If anyone wants to do things that do not adhere to the rules that are agreed on by the other participants, then the rest of the network will not want to work with you. And, they can detect the changes made to the database easily.
#5 There isn’t privacy
As transactions are recorded permanently and any changes made to the database is visible to the other members in the network, it doesn’t mean that there is everyone can tell what your activities are. There are blockchains with inbuilt mechanisms that make it hard to impossible for others to know who did what. And, cryptographic techniques made this tougher. But the downside is that these techniques are complex that they consume a lot of storage space, which in turn reduces the number of transactions added to a Blockchain.
#6 Its easy to create a blockchain from a cryptocurrency
Firstly, it is important to know the two terms. A cryptocurrency is a method to transfer the ownership of money between two parties without a middleman. On the other hand, a blockchain is a component, which makes this possible. It is a data structure that records the order in which the transfer of ownership has taken place. People think that they can do more with a blockchain. Though this could be true, the system undergoes a major transformation when cryptocurrency is removed from the picture.
#7 Blockchains waste energy
Many people think blockchain wastes energy. The mining process, which adds the block of a transaction to an open blockchain requires energy. The amount of energy depends on the level of competition to be the next one to add a block. In open blockchains, this amount of energy is transparent, so it paves way for the criticism on how harmful the system could be. It is possible that there will be better options in the future as the work is in progress. The development of infrastructure technology is time-consuming so better alternatives could emerge soon. You can get to know more about the energy discussion from here.
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