Blockchain technology has been around for a while, but for many it’s still a relatively new concept with a great deal of both excitement and confusion around it. Like any new technology, if you don’t know what it is, it can be difficult to understand not only what it does, but also its capabilities, limitations and where it is going to go in the future. With that in mind, we’ve decided to break down the myths and dispel the misconceptions behind blockchain. This can help you get a deeper look and understanding into what it could potentially do for your company going forward. Keep on reading to find out more and get inspired.
A brief summary of blockchain
Blockchain is a digital, ledger technology that records transactions in a way that makes it almost impossible to tamper with or intercept. Instead of relying on one authority such as a bank, blockchain distributes data across multiple nodes in a network meaning no single entity controls it. There are a number of cryptographic hashes and consensus mechanisms that secure each block in this chain and make it so hard to be changed. The main types of blockchain include public blockchains, private blockchains and consortium blockchains. Some of its main uses include cryptocurrency, smart contracts, supply chain tracking, and for voting. There are also a variety of block chain services you can use, including the likes of morph block explorer – take a look at what these services offer and whether it’s right for what you’re after.
What are some common misconceptions of blockchain?
There are many misconceptions of block chain. This includes:
It can only be used for Cryptocurrency
One of the most common misconceptions of blockchain is that it can only be used for cryptocurrency. While it was originally invented for Bitcoin, which is a form of currency, its underlying technology runs much deeper than this. Infact, Blockchain can be used for a wide array of applications. This includes those mentioned above such as smart contracts, supply chain management, healthcare and to vote thanks to it being such a secure service. There are many different cryptocurrency blockchains out there, but this isn’t the sole thing that it can be used for.
It is always bad for the environment
The environment is one of the hottest topics of the moment, particularly with people knowing things like AI being highly impactful. With this in mind, one of the biggest blockchain misconceptions is that it is always bad for the environment. While Bitcon’s proof-of-work model might not necessarily be the most sustainable, there are alternative consensus mechanisms which are much less energy intensive and are being adopted by projects who are worried about the impact that blockchain can have on the environment both in the short and long term.
It’s too complicated for everyone to use
People often see Blockchain as something that is extremely technical and therefore only good for those that are experts in the field. While they are widely used by those within the tech field or those that understand it, they are rapidly becoming more user-friendly all the time. WIth the most industries that adopt blockchain technology and the more mainstream it becomes, the easier their interfaces and the tech is becoming to use. There are a myriad of ongoing efforts to improve the ease of use and its accessibility to the average person as opposed to just targeting experts.
There are no fees involved
While blockchain transactions might negate the need for a third-party such as a bank to sort it, this doesn’t necessarily mean that it is free. Many people think that without the need for an additional party they don’t need to pay, however maintaining a blockchain does have costs, for example mining and transaction fees. These are necessary to keep the system running smoothly and also ensure it is secure. No business model can run without making money and blockchain services are no different. Fees can differ depending on the technology, the use and the company you use so check this out.
These are just a few common misconceptions of blockchain that people might think about when they consider this technology. It’s important that you understand the concept beyond the myth, particularly as it’s anticipated that blockchain will become more integrated in everyday life and different uses. Do you currently use blockchain or are looking to do so in the future? If so, what are some top tips you have? Let us know in the comments below.