Myths About Blockchain Technology

What is Blockchain Technology?

Don and Alex Tapscoot said that The Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.
  • Blockchain is a distributed databases that record data in the encrypted format.
  • It is a digital ledger of any transaction.
  • We can access these digital ledger across the world. And it is not bound to kept in a single place.
  • This technology introduces the concept of Decentralization and digital currency.
  • It is designed to be transparent,secure,efficient.
  • This technology typically based on cryptography technology.
  • In Blockchain every transaction is stored in blocks.
  • The database used by Blockchain is managed autonomously using peer-to-peer network.

In this article, I am going to explain about top 07 myths of Blockchain.

Myth01: Blockchain Is Bitcoin

Bitcoin != Blockchain

Since Bitcoin is most famous Cryptocurrency underlying technology,Many people get confused between Blockchain and Bitcoin.

Blockchain is a technology that allows peer-to-peer transactions to be recorded on a distributed ledger across the network. As earlier said These transactions are stored in blocks and each block is linked to the previous one, this creates a chain in the network. Blockchain is transparent and permanent. No one can remove a transaction from the ledger.

Bitcoin is a Cryptocurrency that makes transaction from user-to-user on the peer-to-peer network network without need of intermediaries. Bitcoins are created and stored on virtual wallet. Since there is no intermediaries between two parties, no one can control Cryptocurrency. Hence the generation of Bitcoins are limited and it will be implemented by using mathematical algorithms.

Myth02: Blockchain Should be implemented in Go or C/C++

Blockchain technology should be written in languages that permit as much static verification as possible.

Languages with strong static typing and functional programming are good fit for implementing Blockchain.

Some of the good programming languages that can be used in the making of Blockchain technology are

  • C++
  • JAVA
  • PYTHON
  • RUBY
  • SOLIDITY

HASKELL and SCALA are also providing robust choice for implementing new Blockchain technology.

Myth03: Blockchains Are Anti-Government

Blockchain + Government = ?

The distributed ledger technology can be used in array of applications, which has helped it attract growing attention from government around the world.

Blockchain technology is providing wide range of public services, including health records, transactions and voting.

Decentralization isn’t inherently anti-government, and governments can find use cases for decentralized technology.

As an example, you could take a look at Tor. It was created by the US Navy, and no doubt certain federal agencies make use of it in various ways (beyond just attempting to locate criminals). The fact that it can be used to circumvent restrictions in place by governments to prevent information from leaving their country is actually something that the US government wants and actively supports despite the fact that it too has to combat with alternative uses of the technology.

So although decentralization could have "anti-government" uses, that doesn’t mean that it is inherently "anti-government" by itself. It all depends on how the technology is being used specifically. When you’re talking about the blockchain, although they may not have direct control over your private key they do have the ability to easily audit the chain. Your transactions aren’t private - all it takes is one quick look at a block explorer and they can see everything you’ve been up to. Think about the implications in that for a moment. If you were to start funding anti-government organizations, or participating in anything which is anti-government, they would be able to see what you’re up to. Send some money over to a silk-road type site? They’d see that too. Conversely, decentralization could help secure a ton of things run by the government itself to mitigate the damages from a cyber attack. This is why there are some attempts at implementing "smart city" (don’t have a link handy, sorry) type designs which utilize semi-decentralized blockchain designs. Unlike current models which can result in massive outages due to a single effective attack, the decentralized nature makes it much more difficult to take down critical systems.

Myth04: Blockchain is Digital currencies

“Blockchain technology refers to a mathematical innovation that allows us to incentivize independent parties in an untrusted, purely consensual network to provide well-defined, agreed upon services.”

Many early applications of blockchain technology have been directed at the creation of digital assets that can be used as currencies (more precisely: de-centralized, consensus-driven, append-only ledgers).

Blockchain technology itself, however, is neither about nor restricted to the creation of digital currencies.

Blockchain technology provides a shocking answer to one of civilization’s oldest questions. Without force—indeed, with just math—we can engineer cooperation between different parties in a well-defined way.

Classifying the set of viable blockchain solutions is not trivial, but it’s clear based on this definition that any problem uniquely solved by blockchain technology will involve some combination of untrusted parties, multiple jurisdictions, high speed, and low costs.

It should also be clear that some solutions currently marketed as blockchain solutions are not actually blockchain solutions, even though they share some of the underlying math (zero-knowledge proofs, homomorphic computing, lattice cryptography, etc). All blockchain tech involves cryptographic technology, but not all cryptographic technology involves blockchain technology.

Myth05: Blockchain Records can never be hacked or altered

Since Blockchains has inherent permanence and transparency. When people often think that Blockchains are invulnerable to outside attacks. No system or database will ever be completely secure.

Perhaps the most critical hacking incident was in May 2016, when the Decentralized Autonomous Organization (DAO), was attacked by a hacker exploiting a vulnerability in its smart contract code, dealing a blow of around $60 million. It led to a forking of the Ethereum blockchain into Ethereum and Ethereum Classic. This was followed by a DNS attack on Bitcoin Block Explorer - Blockchain, which led to compromised passwords for bitcoin users.

Blockchain has been developed by humans, hence it is susceptible to human errors. Although it works on SHA (Secure Hash Algorithm), it is vulnerable to hacking by stealing the private key.

Mytho6: Blockchain is free

Blockchain is neither cheap nor efficient to run. It involves multiple computers solving mathematical algorithms to agree a transaction in a network for a immutable result. This process is called as single version of truth(SVT).

Each block in the Blockchain network use lot of computing power to solve. Someone needs to pay for all this computer resources that supports the Blockchain service.

Myth07: Blockchain is going to eradicate the threat of fraud in online

We can use Blockchain for complex and technical transactions. It includes verifying the authenticity of a diamond or the identity of a person. There is also talk of a Blockchain application for the bill of lading in trade finance.

While Blockchain can support these cases and mitigate the risk of a fraudster tampering with the ledger, it doesn’t eradicate the threat of fraud in online and it still raises questions over confidentiality. Additionally, the use of Blockchain technology will still be inefficient for many of these cases when compared to maintaining a traditional ledger.

Conclusion:

These are the top myths about the Blockchain technology. Which probably many of the people think and if any mistakes identified in the article keep notify me.