There’s a new kid on the street and its name is “Blockchain.”
It’s a futuristic database technology that made its grand entrance into the Fintech circles and has quickly been making its way down to the level of the public sector. So far, Blockchain’s reputation has upheld under the pressure of beta testing and soft launches from curious companies worldwide. Yet, with Blockchain’s introduction into society have come a myriad of misconceptions and myths that falsely define the true essence of its usefulness. It’s important for us to establish a clear understanding of this groundbreaking technology in order to embrace the waves of technological change that Blockchain introduces.
Here are 5 big Blockchain misconceptions you need to know:
Myth 1: Blockchain is Cryptocurrency.
Ever since Bitcoin hit the scene, most people identify Blockchain as Cryptocurrency, which is not the case. Cryptocurrency, a cryptographically secure digital financial medium, utilizes the functionality of Blockchain but is in itself a separate concept. Cryptocurrency is just one expression of Blockchain’s utility, and there are endless opportunities to use Blockchain throughout various industries. A similar misconception is that Blockchain is a new programming language. Blockchain requires coding, but it isn’t the latest programming language as some might believe.
Myth 2: Entire systems have to be built on Blockchain.
Many decision makers are wary of adopting Blockchain into their processes because they believe their entire system has to be modified or rebuilt on the Blockchain. In reality, you can choose one element of your process to become Blockchain enabled, and the rest can stay the same. The purpose of having a Blockchain is to memorialize specific content for greater security, not to overturn your entire company’s data structure.
Myth 3: Blockchain is hard to create.
Surprisingly, Blockchain is relatively easy to create if you have a smart team of developers who know what they’re doing. The time it takes to build a Blockchain model for your data isn’t as big of an ordeal as is the process of implementation. The hardest part about introducing any new technology into your daily operations is getting everyone on board to use it. For instance, if you want to use Blockchain for your supply chain management, then you not only have to make sure your staff knows how to use the system, but everyone involved in every step of the process uses it, too. This includes third-party suppliers, store owners, truck drivers, and the list goes on. If you can successfully inspire your people and other companies to use the Blockchain, you’ll be golden.
Myth 4: Blockchain is a storage mechanism.
To put it simply, Blockchain is not a storage mechanism. It can be built around various forms of storage, mostly utilizing decentralized storage via dozens of individual nodes. These devices are connected to the Blockchain network where all of the Blockchain’s information and records are stored. A big part of what makes Blockchain work so well is its use of a global network of computers, giving power to the network rather than one centralized authority.
Myth 5: Blockchain is hyper-secretive.
The Blockchain is not hyper-secretive unless it is privately held. Private Blockchain networks are accessible through an invitation only, which must be validated by the network before allowing access to a new user. In addition, participants can have restricted access to information on the Blockchain depending on the permissions given to them by the network starter. Even though private Blockchains are a little more top secret than public ledgers, the whole point is to ensure the system is built on a wide network of users. Blockchain isn’t hyper-secretive, but it is hyper-secure because of its tamper-evident technology designed to alert the network of possible breaches. All changes require a consensus from the group, preventing hackers from successfully causing damage to the data.
It’s just as important to know what Blockchain is not, in order to understand what it truly is. Companies are starting to catch wind of the groundbreaking technology and opportunities that Blockchain offers, and we’re committed to staying in the know on industry trends such as these to keep you informed. If you have any insight or questions about Blockchain, we’d love to hear from you!