Rapid incorporation in combination with a mainstream global adoption of cryptocurrencies and other futuristic innovations makes blockchain one of the most disruptive technologies in existence. Current reports suggest over 85.9% annual growth with the global markets expected to reach $1431.54 billion within 2030. While BFSI and supply chain management have been the biggest sectors of blockchain implementation, others are catching up quickly.
Blockchain: Myth vs Reality
While the global buzz surrounding blockchain technology persists, it is important to remember that the hype may differ from reality. This article will shed light on some of the popular myths around blockchain.
Myth #1: Blockchain-Database operates on Cloud Technology
A general misconception about blockchain or distributed ledger technology is the opinion that it acts as a cloud-based database. Yes, both are new-age technologies and associated with data storage. However, their respective roles and functions are drastically different.
To start things off, data stored in cloud storage can be modified, unlike blockchain technology where it is immutable. Cloud technology offers multiple computing services across the internet. Whereas blockchain system comprises several encryption methods alongside hash for data storage across a distributed online ledger. Cloud-based storage systems can be private and public as per requirements.
Also Read: Washington Passes Law Targeting Enhanced Blockchain Adoption
Myth #2:Blockchin Transactions are Anonymous and Untraceable
The usual consensus suggests blockchain and crypto transactions are anonymous. However, a person well-versed in blockchain operations will disclose something different.
The blockchain architecture keeps note of the public address of the recipient wallet as prevents revealing the owner’s identity. However, illegal crypto transactions are, in fact, traceable. Law enforcement agencies utilizing the help of blockchain experts have been successful in apprehending cybercriminals and ransomware attackers with a high degree of success. All transactions of a particular wallet can be easily retrieved if the actual identity of the wallet owner is revealed.
Myth #3: Blockchain is Completely Secure and Impregnable
From a technical perspective, the architecture of blockchain is a robust one, complete with SHA-256 security encryption offering a fortified system. But, there are loopholes in between. A 51% majority in the blockchain’s consensus mechanism can easily manipulate transaction records.
The security of a blockchain network is dependent largely upon its algorithm’s strength. A vulnerable cryptographic hash algorithm reduces the resilience of the entire blockchain network. A large number of network members/nodes decrease the risk element, as per blockchain experts. This is why public and large-scale blockchains are more difficult to break than small blockchain groups.
Also Read: Blockchain Integration to Change the Existing Music Industry
Myth #4: Blockchain Networks are Public
While most large-scale blockchain networks associated with cryptocurrencies remain public and decentralized, private centralized blockchains exist as well. They are used by corporate brands for communication within their organizations, or with external labels as part of a consortium.
Additional classifications of blockchain include hybrid and private blockchains, permissioned(or federated) blockchains. Permissioned blockchains may be either private or public.
Myth #5: Blockchain is an All-in-One Wonder
Despite its revolutionary potential as a technology capable adept across multiple sectors, it is crucial to understand that blockchain is not a comprehensive solution for all sorts of problems.
Blockchain is best used across domains that give priority to its inherent characteristic features- transparency, immutability, and optimized efficiency. While it is easy to understand its appeal, it is however not the ultimate solution for every problem. One can argue that wishful flexibility potentially hampers the spirit of innovation and problem-solving.
The growing number of blockchain-based applications is quickly proving its reliability across multiple domains. Shedding light on the aforementioned misconceptions will hopefully help organizations gain a clear insight into the usefulness of blockchain integration.