The blockchain is about a decade old. Since its introduction, it has had a significant and growing impact on the world of finance. Today, some of the largest financial institutions have an active blockchain research facility. Some have even implemented the blockchain in their operations. If you plan to get into the blockchain space, it is important to have a clear understanding of the technology. Here are some common misconceptions about the blockchain.
Blockchain is the same as Cryptocurrency
Some people falsely equate the blockchain to Bitcoin and cryptocurrency. However, Bitcoin is just one implementation of the technology. While the two complement each other, the blockchain can be used for other purposes. In fact, every industry can implement the blockchain for various purposes. Industries such as real estate and healthcare are making massive moves into the blockchain space. Most recently, we talked about developments in the logistics space, which is another industry benefitting from blockchain technologies.
There is little information Available about the Blockchain
A common myth is that there is little information about the blockchain available to the public. In fact, most of the information about the technology is publicly available. Besides that, many people believe that the reason for this mythical secrecy is that the technology is mostly used for criminal activity. This is not the case.
Transactions on the Blockchain Are Anonymous
Most people falsely believe that Bitcoin transactions are anonymous. As a result, if you wanted to keep monetary transactions private you would only need to use the blockchain. This is not the case. Authorities have come up with tools to detect blockchain transactions in the recent past. If the authorities want to trace a transaction, they can do so. The one value prop to Blockchain tech is the ability to keep track of immutable data. The data is far from anonymous and actually gives companies competitive advantages from a tracking standpoint.
The Blockchain is Not Reliable Due to the Volatility of Crypto
Many people look at the volatility of cryptocurrency and they conclude that the blockchain must be equally volatile. However, this is not the case; the blockchain has many use cases aside from cryptocurrency. Currently, the initial use case of the blockchain is overhyped while the underlying technology has been greatly underrated. Some of the largest companies in the world are making strides into Blockchain beneath the surface. Not too long ago, Amazon was linked to enhancing its advertisement divisions through Blockchain integration. VF also shared this image on Twitter back in June. It showed how IBM, Microsoft and Accenture were the leaders in this space right now, and how the industry was expected to grow drastically based on Wintergreen investment research.
Only Criminals Use Cryptocurrency
While decentralization and anonymity have proven attractive to criminals, they only make up a small percentage of the entire crypto market. Many law-abiding citizens and leading financial firms have delved into the crypto space. In fact, crypto is one of the best ways to keep your money safe from hyperinflation in the economy of your nation collapses. It’s actually easier to track criminal activity on the blockchain. If a person commits a crime with paper fiat, it becomes very difficult to track. Implementing a digital economy on the Blockchain would arguably create a safer economy.
Blockchain Can Only be Used for Storage
A common misconception about the blockchain is that it is used for storage. However, this is not the case. It can more accurately be described as a secure medium of exchange with immutable records.
The Technology Can Only be used in Finance World
People in the world of finance are the ones mainly used the blockchain technology. However, this is not its only use case. As explained above, there are many other industries experimenting this industry right now.
With the few myths above debunked, it should help you get a better understanding of the blockchain. It’s important to share these concepts with friends / family. Millenial and Baby boomer generations still have an extremely hard time understanding Cryptocurrency and Blockchain. The space is still so young, which many people forget sometimes. People get tied up in bitcoin price volatility and forget to assess the underlying fundamentals that exist.
Image Source: Flickr