Top Blockchain Myths and Distributed Ledger Technology Misconceptions
Despite the fact that blockchain technology has been a hot topic in the tech world for more than ten years, it is still considered new and relatively unexplored. While some believe that it represents the next step in humanity's technological advancement, others see it as risky, or a technology that allows schemes.
On the one side, there are those who believe blockchain to be a solution to every problem out there, and on the other, there are those who consider it fake. Both are mostly wrong, as they likely lack a proper understanding of this technology.
Myth #1: Blockchain is the ultimate solution
While it is encouraging to see people believe in the blockchain, many often go a step too far and become a lot more enthusiastic about it and its potentials. While blockchain does have the potential to provide numerous solutions and change some industries, it is not a quick fix for every problem out there.
Blockchain can be very beneficial to industries suffering from centralization issues, and it is very efficient when it comes to safely securing information. It can also ensure the privacy of the user, as well as access at any time and any place. However, there are still many problems that blockchain cannot address.
In fact, it should be considered a tool which offers aid in fighting the problem, and not a complete solution to it.
Myth #2: Storing data on blockchain endangers users' privacy
Many have the idea of blockchain being the technology that can resolve data management issues by placing the information on a distributed ledger. That much is true. However, a lot of people might not be aware that this will not endanger their sensitive information. This is possible due to cryptography, which is technology that cryptocurrencies use.
To put it simply, the data stored on the blockchain can be locked through the use of an encrypted digital signature. This will allow only those with authority to see what is actually stored.
Basically, you own your own data, and you get to choose who gets to see it, how long can they have access to your data, and which parts can they view. That way, you have all of your data in one place, safe, and encrypted.
Myth #3: Cryptos and crypto scams make blockchain a scam too
This is not exactly a myth, but more of a wrong point of view. Let us explain.
Yes, cryptocurrencies have been the hot topic of the past decade, and yes, they are the blockchain's original use case. It is also true that there are crypto scammers who misused this technology to harm others by stealing their money. However, what people need to realize is that blockchain is not a flawed technology. Instead, the flaw lies with those who misuse it.
A blockchain is a tool that can be used for good, positive things which can help change numerous industries, make them more efficient, cheaper, and faster. However, like any other tool, it can be misused as well. The tech itself is not a scheme, it is the scammers who give it a bad name.
Myth #4: Private blockchains are nothing more than shared databases
This is another common misconception that can appear among those who do not quite understand how DLT works and what it is. When we talk about a distributed database, it can be accessed only by those who have permission. And yes, it is true that this is also a feature of the private blockchain.
However, maintaining a distributed spreadsheet can be very expensive, as it requires costly data reconciliation. Banks do it, and they have to spend a fortune on maintaining a shared data sheet.
When it comes to the private blockchain, it works exactly like the public one, only it has a smaller network, and only certain handpicked users can access it. All authorized members can make changes, and if you really want to view it as a shared database, think of it as the much more advanced version of a shared data sheet, which solves the issues of the regular shared data sheet.