10 myths about blockchain

10 myths about blockchain

The hype about Bitcoin has negatively affected blockchain. One has immediately become aware of technology prior to its rapid integration. Besides, very few people of the wide audience have figured out the details.

The majority of inhabitants know about blockchain only something found on social media: memes, “interesting facts”, and quotes out of context. Therefore, we have collected the most popular Internet myths about blockchain and dispelled them.

Myth 1. There is only one blockchain

The word ‘blockchain’ is used in the singular when talking about the technology. However, unlike the Internet being the single information space, there are a lot of blockchains. But they are not reported.

It is still impossible to conduct transactions from one blockchain into another, but there are some successful experiments with such transfers. At the same time, the number of blockchains is not equal to the number of blockchain projects. For instance, many startups use Ethereum or Waves, but some of them develop their own customized blockchains.

Myth 2. Blockchain is always related to cryptocurrency

The largest and best-known blockchain belongs to Bitcoin. System indeed related to virtual money. Its developers strived for creating new currency. Such cryptographic payment systems as Ripple, Dash, Z-cash, and Monero had the same goals. Nevertheless, some blockchains have been developed for other purposes. For example, Ethereum, BitShare, and Waves are platforms for blockchain projects. Blockchain-based solutions include games, exchanges, identification systems, and public services.

Myth 3. Blockchain is another hype, which is useless in practice

"If blockchain is a revolutionary technology, why has the world not yet shifted to it?” skeptics ask. Well, it’s not all that simple. New technologies require research and testing; blockchain is relatively young. The first network was launched in 2009, 9 years ago. As a comparison, the Internet was invented in the 70s. Now, the statistics shows that it is used by the every second terrestrial (3.3 billion people). But such a progress required 40 years.

The blockchain actual usage area is wider as it seems. Besides Bitcoin, which mining and turnover have already turned into a billionth industry, it includes various apps and local services. Moreover, public services of some countries (Chile, Ukraine, and Estonia) are based on blockchain.

Myth 4. A lot of states want to ban or restrict blockchain

Actually, the world follows the concept ‘Blockchain rather than Bitcoin’. Many countries have cautious attitude to cryptocurrencies; not everyone is ready to recognize them as a payment method. By the way, virtual money are banned in Bolivia, Kirghizia, Ecuador, and Vietnam.

Neverless, none of states refuse the importance of blockchain and its prospects. The Hyperledger consortium created to explore and promote blockchain consists of 200 companies from dozens of countries.

Myth 5. All actions are anonymous in blockchain

Classical blockchain (distributed ledger) is transparent for all participants. All transactions on Bitcoin and Ether networks can be seen. It would make little sense, as Bitcoin wallets are anonymous; however, there are special programs that identify their owners. US intelligence agencies apply such software and services of transaction tracking specialists.

There are also blockchains with encrypted transactions: in particular Zcash and Monero. Therefore, it would be more correct to say that actions are anonymous only in certain blockchains.

Myth 6. All personal data in blockchain are available to everyone

A contrary myth says that blockchain allows everyone to see your personal data. It is not quite so. Registering a wallet, you won’t have to enter your name, document numbers, or credit card data. This might be needed for verification on the exchange, but your personal information will remain hidden there.

It is the wallet number that will be available to other blockchain participants. But it is impossible to refer this number to the owner without special equipment.

Myth 7. Blockchain will make a new technological revolution

Crypto-anarchists claim that blockchain will change the overall life and conduct a one more technological and social revolution. Meanwhile, experts believe that such a statement is premature. Blockchain has a narrow focus, thus it will change only those sectors where it will be applied such as public services, electronic payment systems, and banking business. Changes will be likely implemented gradually.

Myth 8. Blockchain is aimed at geeks and financial experts

Understanding the concept of distributed ledgers and nodes as well as token components is not the easiest thing in the world. But to use these services, one should not necessarily know all the technical details. Today, billions of people utilize emails, social media, graphic and text editors without thinking of the operational concept of computer, the Internet, and electric grids. In future, we will also use public services and money transfers based on blockchain.

Myth 9. Blockchain allows to store documents and photos

Some users associate blockchain with a cloud service or torrent tracker, thus they are sure that it allows to store various files. It's not like that. Blockchain is a distributed ledger that stores only encrypted records. So, it can include links to photos and documents, but not files.

Myth 10. Blockchain records are unchangeable

Indeed, one is not allowed to edit data in blockchain: they are encrypted and added to blocks. A block added to the chain cannot be changed. It does not mean that data entered once will remain in blockchain forever. There are some ways to change information in blockchain. One of them is fork (rollback) that cancels recent changes. There are also changeable blockchains allowing to cancel recent transactions by consent of the majority of participants.

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