Blockchain technology has become one of the most high-profile emerging technologies in the past few years. It is now being explored in many different sectors, including governance, public service delivery, insurance, banking, supply chain management, and more.
The many use cases for blockchain was also a popular topic at CoinGeek Conference Live 2020, a virtual conference where experts from around the world weighed in on the past, present and future of the Bitcoin SV blockchain (you can watch our founders discuss the ways kompany will further innovate the Business KYC experience using blockchain here).
However, despite being the biggest buzzword around, there still exist several misconceptions about the technology. Here are five of the most common misconceptions about blockchain, debunked:
1. "Blockchain is only applied in digital currencies"
The first, and probably the most popular misconception is that blockchain is only use case is in digital currencies. This misconception arose because digital currencies were the first widely popular application of the technology.
However, blockchain can record all sorts of transactions, making it suitable for use in every other industry. De Beers and Walmart are using blockchain in supply chain management; the FDA and Pfizer are using it in healthcare; MetLife and AIA Group are using in insurance; Maersk and FedEx are using it in logistics and so on.
2. "Blockchain is only good for crime"
Another common misconception about blockchain technology is that it’s only good for nefarious purposes. This association has most likely been drawn from the use of digital currencies to facilitate online crime, especially in the dark web. While it’s true that digital currencies have been used in crime, this is only a tiny fraction of the full picture.
More importantly, blockchain’s association with crime is completely misplaced. On the contrary, blockchain is being used to fight crime with great results. Since the popular public blockchains are immutable, many companies are integrating it to prevent such crimes as counterfeiting.
3. "Private blockchains are more suitable for enterprise use"
With the rise of blockchain technology, several institutions have sought to build private databases that pose as blockchain networks while still retaining control of these networks. These databases are known in most circles as ‘private blockchains’.
Most people have come to believe that these ‘private blockchains’ are more suitable for enterprise use. However, this is simply not true. The Bitcoin blockchain, which is public, was created by Satoshi Nakamoto to scale and accommodate enterprise applications. Additionally, there exist techniques that enterprises can use to safeguard their privacy on the blockchain.
4. "Blockchain is completely free"
Creating a blockchain involves an extreme amount of computing power which requires multiple computers solving mathematical equations to agree on one immutable result, which becomes what's known as the single version of truth (SVT). Because so much energy is required to solve these equations and in turn, add blocks, it can actually become quite costly to build and maintain a blockchain.
5. "Blockchain is immune to regulation"
Blockchain is a relatively new technology and as a result, most governments have yet to formulate regulations to govern its use. This has led to a misconception that it’s beyond the reach of authorities. This false belief has further been entrenched by yet another misconception that blockchain transactions are completely anonymous.
However, blockchain is still subject to regulations. Just as with any other technology, the government has a responsibility to govern its use to protect the public. In most parts of the world, authorities are already using blockchain analytics software to monitor most public blockchains, narrowing down on any illegal activities.
This also indicates an important step for the technology itself, one where regulators, governments and businesses fully embrace the use of blockchain together, leading to a more efficient and secure future.
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