Mar 16
The 3 Most Common Blockchain and Cryptocurrency Myths
Blockchain technology is still a relatively new concept. As such, it is not surprising that misconceptions about the technology abound. Below are the three most common blockchain and cryptocurrency myths.
1. Cryptocurrencies are only useful for crooks
It has been said that blockchain is only good for criminals. But what does it really have to do with crime?
The blockchain is a digital ledger that records transactions between parties in a verifiable, permanent way. The most popular use of blockchain is cryptocurrency, which uses cryptography to secure transactions.
Sure, criminals are attracted to its decentralized nature, meaning there’s no central authority monitoring their transactions, but to conclude that’s the only use case is flawed logic. It’s the same as concluding that criminals use guns, so it’s only useful to bad guys. Shouldn’t cops have them too? And that’s the point: blockchain technology can be as beneficial or even more beneficial to the good guys.
2. Bitcoin allows for complete anonymity
The second most popular myth about cryptocurrencies is that they allow for anonymous transactions. This is not true. This myth has been debunked by many sources. Every cryptocurrency has its own privacy features, but these are not foolproof. These digital currencies reveal a lot more information about you than you might think.
For example, users can easily be identified if their IP address gets traced back to them.
This myth stems from the fact that Bitcoin, which was the first cryptocurrency to be developed, did not have much information on who was behind it.
3. All blockchain activity is private
Even though some businesses build their own private blockchains that are exclusively available to workers and business partners, the majority of the blockchains that underpin well-known cryptocurrencies like Bitcoin are open to the public.
The truth is that blockchain activity is not 100% private. It is only pseudonymous, which means that a public ledger of transactions can be seen by anyone with the right software and knowledge. For example, you can view real-time Bitcoin transactions here.
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