Blockchain Technology: Top 5 Myths Which Needs To Be Debunked
Blockchain, the platform called “distributed ledger,” has arisen as an object of extreme interest in the tech industry and beyond. Blockchain technology offers a way to record transactions or other digital interaction in a way that is built to be secure, transparent, highly resistant to outages, auditable and efficient; as such, it brings with it the potential of transforming markets and allowing for new business models. The technology is youthful and very changing rapidly; widespread commercialization is still a few years off.
Blockchain is a blockchain that preserves an enormously growing set of records of data. This is distributed in nature, that is, no master computer carries the whole chain. The involved nodes have a chain clone, instead. This is also growing — and the data records are added to the chain only.
Why Is Blockchain Considered Invisible?
A Blockchain is made up of two central elements:
Transactions are the actions the participants make in the system.
Blocks record these transactions and ensure that they are in the correct sequence and have not been manipulated.
Blockchain’s main asset is it’s being public. The blocks and the transactions contained in them are accessible to all involved. Though, that doesn’t mean anyone can access the real details of the transaction; the private key protects it.
A Blockchain is decentralized, and no single authority can sanction the transactions or set specific rules for approving transactions. This means there’s a massive deal of confidence involved because all network members need to reach a consensus to accept transactions.
Most importantly, it is secure. The database can be extended only, so existing records can not be modified (at least, if anyone wishes to modify records, there is a very high cost).
When anyone wants to connect a transaction to the chain, it must be checked by all participants in the network. This they do by adding a transaction algorithm to check its validity. The Blockchain system defines what exactly is known as “valid,” which will vary between systems. Then it’s up to a majority of the participants to consent on the transaction is valid.
Blockchains fall into three categories:
Public: A public blockchain is a blockchain where anyone can see all of the transactions, everyone can expect their transaction to appear on the ledger, and eventually everyone can take part in the consensus process.
Federated: Federated Blockchain does not require anyone to take part in the process of consensus. Only a small number of nodes are allowed to do so. Of starters, we might assume in a group of 20 pharmaceutical firms that 15 of them have to decide for a block to be legitimate. Nonetheless, access to the Blockchain can be public, or restricted to the participants.
Private: Private blockchains are widely used inside a business. Only specific members are permitted to use it and perform transactions.
There are certainly several positive aspects of blockchain technology, but there’s still a sense of confusion and ambiguity about its nature.
Myth # 1: The Blockchain Is A Magic Cloud Database!
Conceptually, the Blockchain is a flat file-a linear list of simple transaction records. “This list is ‘append-only and entries are never discarded but then the file expands indefinitely and needs to be repeated in any node on the peer-to-peer network”.
Blockchain doesn’t require you to store any sort of physical information such as a Word document or a pdf file. This can only have a “proof of existence” the distributed ledger will provide only a code that certifies the validity of a particular document but not the document itself. However, the information can be stored in “data lakes,” to which the owner of the details controls the information.
Myth # 2: Blockchain Is The Total Game Changer!
For complex and technical transactions, we can use Blockchain-such as verifying a diamond ‘s authenticity or a person’s identity. There’s also talk of a Blockchain application for the trade finance lading bill, which will be groundbreaking in terms of cost reduction and speed of the transaction.
While Blockchain will help these cases and mitigate the risk of a fraudster exploiting the ledger, it does not eliminate the danger of online fraud, and it still poses security concerns. Besides, the use of Blockchain technology in many of these cases will still be inefficient compared to maintaining a traditional ledger.
Myth #3: Blockchain Is Free!
Despite the popular perception that Blockchain is not inexpensive or effective to run-yet. It requires several computers to solve mathematical equations to achieve consensus on a final eternal result, which is the so-called definitive version of reality (SVT). Usually, each ‘block’ in the Blockchain requires a great deal of computational power to solve. So for all the computing power, the enables the Blockchain service, someone has to pay.
Myth # 4: Only One Blockchain Is There!
Many different technologies go by the name Blockchain. These come in both public and private versions, open and closed source, general-purpose and tailored to particular solutions.
The common denominator is that they are crypto-sheared, are distributed, and have some kind of mechanism for consensus. Bitcoin’s Blockchain, Bitcoin, Hyperledger, Corda, and Blockchain-as-a-service by IBM and Microsoft can all be categorized as Distributed Ledger Technologies.
Myth # 5: The Blockchain Can Be Used All Needs
Although the code is potent, it is not magical. Developers of Bitcoin and Blockchain may be evangelical and it is easy to see why. The Blockchain is an authority tied to mathematics for others, not the government or lawyers. To some developers’ eyes, one day the Blockchain and smart contracts will replace assets, lawyers, and other arbitration bodies. Even the coding in the chain itself is restricted to the number of cryptocurrency transactions, and cryptocurrency is still far from the mainstream.
