Blockchain technology has gained a lot of momentum over the past few years, especially with the rise of Bitcoin. To review, blockchain, or the “distributed ledger” technology, offers a way to record transactions or any digital interaction securely and transparently by design. It is a database that maintains a continuously growing set of data records. One of its biggest advantages is that it is public, so the transactions stored in in the ledger are transparent.
Blockchain has been one of the most fascinating technological advancements in recent years. However, as with many other technological advancements in the past, there are many misconceptions surrounding blockchain technology. Take a look at some of the most common myths surrounding blockchain.
The Blockchain Can Be Used For Everything
The code behind the blockchain is compelling, but it is not magic. Some blockchain experts believe that the blockchain and smart contracts (contracts executed using blockchain) will replace money, lawyers, and other arbitration bodies one day. The only problem is that the code is insufficient given the number of cryptocurrency transactions in the chain. Additionally, outside of Bitcoin, cryptocurrency as a whole is a long way from becoming a mainstream payment method.
Blockchain Records Can Not Be Hacked
As previously mentioned, one of the most popular features of blockchain technology is the security and transparency. Due to this, users typically assume that it is impervious to hacking and other outside attacks. However, like all technology, it is not immune. On the other hand, blockchains can provide applications developed on top of them a way to catch any unauthorized changes to records. Usually, the larger and more distributed any network is, the more secure it appears to be.
Blockchain is Bitcoin
This is another common misconception people have about the blockchain ledger. Due to the fact that Bitcoin garnered more popularity than its underlying technology, people tend to equate the two. Blockchain is the technology that makes for peer-to-peer transactions to be recorded on a distributed ledger across the network. On the other hand, Bitcoin is a cryptocurrency that makes electronic payment possible between two parties without the process of going through a third party. Users create and store Bitcoins in a virtual wallet. So blockchain is the distributed ledger through which Bitcoin transactions take place.