Blockchain technology streamlines operations by cutting wasteful spending on record keeping, third-party verification and inefficient communication channels. Furthermore, it offers a trusted channel for transparent transactions to take place.
Blockchain has quickly transformed industries around the globe, yet some misperceptions about what it actually does remain widespread. Here are seven of them.
Myth 1: Blockchain is only good for cryptocurrencies
Blockchain has quickly gained widespread adoption over recent years and is considered an industry-changing technology. Unfortunately, as with any new innovation comes misinformation. Here are some common misperceptions about blockchain that you should avoid believing presented by Cryptoext.
Blockchain may have created the cryptocurrency known as Bitcoin, but this technology can be utilized for other uses as well. Blockchain has been utilized to store and verify various types of information including transactions, product inventories, voting in elections, state ID cards, property deeds and more.
Another of the more persistent misconceptions surrounding blockchain is its insecurity. While blockchains do make accessing information more difficult for bad actors, they’re not unhackable; changes must be approved by all contributors prior to alteration and additional layers can be added with cryptography techniques for extra protection. It is crucial that you fully comprehend all facts regarding this emerging technology before adopting it into your business processes.
Myth 2: Blockchain is only good for banking
Blockchain is a relatively new technology that may be challenging to comprehend, which has given rise to myths regarding it. Government affairs professionals should gain an understanding of its advantages and disadvantages so they can make more informed decisions regarding whether to include it into their technology stacks or not.
Blockchain and cryptocurrency have quickly gained market momentum, but many people misinterpret the technology’s purpose as improving transparency, security and data resilience for businesses. Unfortunately, many are misled into thinking this means merely buying bitcoins.
Though blockchain can be used to create cryptocurrencies, it’s also important to remember that its design for immutability cannot guarantee full security if someone has sufficient motivation. Therefore, governments must be ready to prevent and investigate money-laundering, fraud and other crimes involving cryptocurrency-related blockchains and transactions.
Myth 3: Blockchain is only good for privacy
People invest in crypto and blockchain for various reasons, but privacy shouldn’t be the only draw. According to experts at MIT Sloan School of Management, blockchains offer businesses from all industries multiple benefits.
Although some cryptocurrencies are designed with anonymity in mind, blockchain networks can be utilized for everything from voting to interoperability of medical records. A Blockchain network may even prove faster and more efficient than traditional transaction methods for certain applications.
Blockchain can often be misunderstood as functioning like a cloud database, though they differ significantly in how they operate and their purposes. This misconception could prevent organizations from exploring it as an option for solving business challenges; dispelling such falsehoods will help them better comprehend this innovative technology and reap its advantages.
Myth 4: Blockchain is only good for security
Blockchain technology underlies Bitcoin and other cryptocurrencies, but has many other uses beyond cryptocurrency transactions. Blockchains serve as decentralized digital databases that can be either public, private, or hybrid; understanding this distinction will allow you to select which type of blockchain best meets your business requirements.
Cryptocurrencies and blockchain are often associated with illicit activities like money laundering, fraud, dark markets and illicit financing. While cryptocurrencies may be associated with these types of crimes, other criminal tactics like phishing attacks or giving away keys for wallets could also be employed for similar goals.
Reminding ourselves that blockchain is not the ultimate answer is also essential; other technologies may prove more suitable in your particular situation. Unraveling these myths will enable us to gain a truer understanding of blockchain’s benefits, as well as enable more informed decisions regarding whether or not it fits with your business goals.