Top 3 blockchain myths
Blockchain today is a very promising emerging technology. However, most people are still unaware of its applications and enormous potential.
Blockchain is an immutable ledger or record at its most basic level. It can be programmed to record virtually everything of value. Blockchain provides enduring security by its immutable ledger that is strongly encrypted.
Let’s take a look at some widely spread misconceptions about blockchain technology.
Myth 1: Blockchain and Bitcoin are the same
A common misconception is that blockchain technology and the cryptocurrency Bitcoin are the same thing. When Satoshi Nakamoto launched Bitcoin in 2009, it was the first real-world application of blockchain. But the concept was actually conceptualized by two researchers in 1991.
Essentially, blockchain is a database of transactions stored in distributed form across a number of computers, known as nodes, on a network. When a transaction is entered, it’s sent to all the network nodes, which solve mathematical problems to confirm its validity in blockchain. Validated transactions are clustered together into blocks, encrypted, and added onto the preceding block, forming a chain of data that lists all the records and requires a digital key to unlock.
Bitcoin, in turn, is a decentralized digital currency that can be bought, sold, and exchanged directly without the need for any intermediary.
Transactions on the Bitcoin network are verified by nodes called miners that race to solve the mathematical problems. Bitcoin information is stored on a public blockchain.
Myth 2: Everyone is anonymous on blockchain
For transactions carried out on blockchain systems it is often assumed that identities cannot be traced. In reality, the technology is based on pseudonymity as opposed to anonymity. To take the case of Bitcoin, whenever you make any transaction, your wallet address is kept in the records and is accessible to everyone.
Until no one can correlate your wallet address with your identity, real-world or digital, you are pretty much anonymous. However, if someone can link the two, your cover is blown.
Myth 3: Blockchain is only used for cryptocurrencies
Cryptocurrencies can be credited for bringing blockchain to the limelight, but the two terms are not synonymous. Blockchain is only the technology behind some cryptocurrencies, but it has multiple use cases across different industries.
Moreover, it has been extensively used in the healthcare industry to secure the records of patients, especially after the COVID-19 pandemic. Blockchain also finds a place in other areas like supply chain management, real estate, trade, and artificial intelligence.
Blockchain is integrated into many other types of businesses as well, including Retail, Supply Chain, Healthcare, Digital Property, Internet of Things (IoT), Education, and many others.
Blockchain has come a long way from being just a new platform for carrying out transactions to becoming the foundation of a new global ecosystem of services with data privacy and transparency as the key principles.
Debunking the myths and explaining blockchain technology, we hope to lead people to a better understanding of blockchain’s enormous potential and spring a new wave of its adoption and development.
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