Blockchain technology is an interesting subject emerging in the tech industry and beyond. It offers a way of recording transactions, designed specifically to be transparent, secure, and highly resistant to outages. This technology is young and changing at a rapid pace. Despite its positive aspects, there are some misunderstandings and confusions regarding its nature, such as:
Blockchain and Bitcoin are the Same
The common misunderstanding is that Blockchain technology and Bitcoin are the same thing. Originally, Blockchain is a database of stored transactions across various computers in the distributed form of blocks. Each block has a link with the previous one, creating a chain of blocks. On the other hand, Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly without any intermediary. Bitcoin information gets stored in the public Blockchain.
Operations of all Blockchains are Similar
There are three kinds of Blockchain, each having its own pros and cons. Some are more expensive, and some are greener than others. The variation between these Blockchains makes it difficult to tackle them from a regulatory point of view. To tackle this issue, you must understand the different ways blockchain works and the attributes each of them possesses.
Blockchain is a Big Database in Cloud
Blockchain is a huge database with added properties. Therefore, its entries never get deleted. The growth of the file is indefinite, and its replicas are on all the nodes in the P2P network. Though Blockchain is a huge database, it does not store any physical information (like a document or image). It only holds a document proof of existence (in codes) but not the document.
Blockchain is Free
One of the common myths is that Blockchain is free. Although blockchain cost regarding Bitcoin has been associated with using computers to solve mathematical problems, the actual price shows a different picture. Bitcoin mining needs powerful and expensive hardware with high electricity consumption. So, there is no reason to consider Blockchain free.
Blockchain Signifies Efficiency
Though Blockchain is powerful, it does not have a magic wand that can make everything better. Originally, some sectors benefited from it and have faster and more efficient systems. However, it cannot work for everyone. Some businesses are better with centralized non-blockchain solutions. So, performing a thorough analysis before implementing anything would be best.
Blockchain Does Not Include Verification
The common problem with many traditional transactions is that ledger can get easily tempered to reflect incorrect information. Distributed databases are one of the fundamentals of Blockchain technology. It ensures all parties can access records in the chain. It is decentralized so no single person has complete control over Blockchain, making it difficult to tamper with.
Finding a Blockchain Expert is Easy
Various Blockchain experts have neither designed nor implemented Blockchain systems. However, skilled Blockchain resources are difficult to find. Moreover, they are very expensive.
To Sum Up
There is no doubt about the Blockchain potential, but this technology is far from perfect. Moreover, misconceptions will only make matters worse. So, it is critical to find the truth about Blockchain technology to improve its implementation.