Blockchain Myths You Shouldn’t Believe!
Blockchain technology was born in 2008, following a Wall Street crash. Transformational technology was the invention of the mysterious “Satoshi Nakamoto”. And now, in a little over a decade, everyone you meet in banking, investing, cryptocurrency, and more, is talking about blockchain.
The first implementation of blockchain technology was in the form of Bitcoin. Bitcoin became an instant hit, and the surge that peaked in December 2017 pushed the price of Bitcoin to a high of nearly $ 20,000. Then 2018 turned out to be the year of the accounts. The price of Bitcoin and Ethereum fell back to Earth within a few months. Many projects have gone by the wayside or have been closed. In the last few weeks, too, we’ve seen a bear run on Bitcoin and it has seen significant erosion in value. With that, there is a question mark over the future of Blockchain as a technology and many people are predicting an apocalyptic day for it.
At this point, it is important to understand what Blockchain is and what is its relevance in the business world?
Blockchain is nothing more than a decentralized and distributed digital ledger. The blocks (digital information) stored on a public database (called a chain) make up the blockchain. These blocks store relevant transactional information such as date, time, participants in the transaction, and what separates one block from another.
As it stands, the government and public sector segments, along with finance, are the biggest consumers. That aside, the technology could also be widely adopted by other industries, such as supply chain and logistics, import-export, contracts, healthcare, among others.
So, what could be holding back the progress of blockchain? Maybe it could be the myths around blockchain and its application. Here are some of the popular blockchain myths.
The first myth is that the blockchain is all about Bitcoin. It’s not. The blockchain is not even a digital coin. Yes, it helps the whole ecosystem. Blockchain, as mentioned earlier, is a distributed ledger. This is the commonly accepted platform on which all peer-to-peer transactions take place. Thus, it can be credited with giving birth to the Bitcoin cryptocurrency. The blockchain is the basis of the secure record which indicates that “x” Bitcoins have been transferred to the miner to spend the computational energies for a specific transaction. These payments are made in peer-to-peer transactions and the coins are stored in a digital wallet. An algorithm determines the limit on the number of parts that can be extracted.
The second myth is that the blockchain is completely secure. Security has now become the primary value proposition for business adoption. The underlying concept of security in blockchain is that it is designed for immutability. To make changes to a particular block, all other blocks or transactions must be changed before that. But that, too, is not a foolproof plan. For example, what if all the members decide to get along? Although there are binding agreements between contributors, which discourage such activities, it is not clear that they are inviolable in the face of sufficient motivation.
Second, the security of the blockchain is governed by the existing authentication and encryption processes. Therefore, it is inherently as secure as any other system. The emphasis is on designing the underlying infrastructure and network to be tamper-proof to ensure security.
Additionally, blockchain technology exists as both public and private. Public blockchains are connected to the public internet and anyone who is connected to it can join the party. Private blockchains, on the other hand, are operated specifically for enterprise level applications. These blockchains are protected within corporate networks. In this case, only people with the necessary authorizations and able to produce the required proof of stake can make the changes. This shifts the security load on the network.
The other major myth is that the key applications and benefits are limited to the financial industry. Today, other verticals such as real estate, healthcare, and even manufacturing have started exploring blockchain use cases. One major synergy that is expected to create an explosion of use cases is the combination of AI and blockchain. AI can increase the capacity of blockchain-based solutions due to its immense capacity for data exploration and processing. Global retail, governance and auditing systems can benefit. It could also help generate use cases in data storage, networking and IoT spaces.
Blockchain has the potential to have a serious impact on the world of data storage due to its inherent advantages. For example, innovative solutions such as distributed storage seem about to emerge. Blockchain could also impact the world of IoT to help manage the massive volumes of data and processing power required to make these solutions work. IDC reported that nearly one in five IoT implementations this year will take advantage of blockchain.
Healthcare began to explore use cases such as managing patient identities and securing transactions with healthcare providers. In the field of pharmaceutical and pharmaceutical research as well, blockchain has proven to have major implications in the management of trials, research and discovery, and security. In a real-life example of the power of blockchain, China has turned widely to this technology to help businesses affected by the coronavirus outbreak, according to a CNBC report.
The key fact about blockchain is that the technology is now ready for the real world. There is no shortage of use cases. Success stories emerge every day. And technology is more than a niche or a novelty. Given the transparent nature of blockchains, their use and applications are sure to become widespread in the future.
Vipin Shankar, Vice-President – Engineering, Calsoft Inc, India