If you are planning to delve deeper into the cryptocurrency market, understanding blockchain technology and cryptocurrency is well recommended. You need to know what you are getting into. Here, we have debunked some of the common misconceptions regarding these technologies.
1. Cryptocurrency Transactions Remain Anonymous
People mainly remain under the false assumption that all crypto transactions happen to be anonymous. Bitcoin happens to be a public ledger that traces how much was sent and transferred from one address to the other. Various government organizations have established connections with notable exchanges for completing the mapping concerning the address to the owner.
2. Smart Contracts Have the Same Importance as Legal Contracts
With smart contracts turning out to be increasingly popular, they have high importance in industries like theft protection, IoT assistance, insurance, copywriting, thereby indicating their legal status within a grey area. When it comes to smart contracts, they are still with us as lines of code that are incorporated when some situations are faced however if contested and challenged in the court of law transactions done have the possibility of being reversed. It largely happens to be because of the new nature of the technology and the subsequent apprehension of people. But smart contracts however can
3. Blockchain Is Not Trustworthy
A typical misconception appears to originate from people who connect the volatility of crypto with the reliability of blockchain. Blockchain technology comes with various applications beyond cryptos and will possibly be a game-changer in the long term. As far as the earliest technologies are concerned, the primary use cases, content, and interfaces are overrated, however, the underlying technologies happen to be underrated.
4. Blockchain Technology is Free
A technology that is capable of implementing algorithms and performing such heavy mathematical functions comes at a cost. As far as convenience is involved, that happens to be something that developers are still operating on. The biggest obstacle towards this aim remains the scalability of this technology. The changeless chips require to be developed as compact as feasible, as data effective as feasible without neglecting the security. Otherwise, nurturing a larger blockchain combination will be difficult.
5. Cryptocurrency and Blockchain is the Same Thing
This myth is probably because blockchain and bitcoin became popular in the same period. However, are they both the same? No, they are not. Bitcoin can be referred to as a currency that enables crypto transactions to take place. On the other hand, blockchain technology can be considered as the distributed ledger technology that allows the transactions to take place in real-time, and it is one of the various purposes. Let us understand it better by describing both in detail
Bitcoin happens to be a form of cryptocurrency or virtual token that does not exist anywhere in the form of notes. Rather, it is a digital currency of value that happens to be generated through mathematical algorithms and stored in the form of code in crypto wallets. Cryptocurrency transactions take place from wallet to wallet for the value to circulate. Blockchain technology, lately, happens to be the most popular distributed ledger technology that acts a record-keeping, hence book storing data.
6. Blockchain Activities are Not Publicly Available
One of the popular misconceptions regarding blockchain technology signifies the illusion that it does not happen to be public. The preponderance of blockchain activity remains rather visible, as opposed to common belief. Moreover, there remain no hidden codes to blockchain technology and no dark secret connected with its actions.
7. Blockchain Technology is Only Utilized for Nefarious Purposes
This myth originates from a related opinion to the latest technology we have explained above. As many people do not happen to be familiar with the process of the technology of distributed ledger work, it remains easier to believe that it happens to be something suspicious. However, once you understand it, you recognize it is the reverse of that. Crypto on the blockchain, a digital platform with immutable records, happens to be far more visible than real cash. Blockchain technology has been adopted by governmental companies concerning their forensic investigation to track down illegal actions such as money laundering and drug exchange.
Also Read: Blockchain 2020: The Year in a Review
8. Blockchain Can Transform the World of Business Transactions
Blockchain technology usually tends to get positioned like a technology that is likely to transform how businesses manage and record transactions. Related to modern methods, it is more difficult to scale, is process-intensive, and requires more time to validate transactions. When it comes to security, it is beneficial if there exists a requirement for immutability and reliable verification of transaction records. Other than that, use cases happen to be limited.
As far as the mass adoption of cryptocurrency is concerned, it is necessary to debunk the myths that have been prevailing within the world of blockchain and cryptocurrency for a long time.