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Myths and Facts about Blockchain
This is a user generated content for MyStory, a YourStory initiative to enable its community to contribute and have their voices heard. The views and writings here reflect that of the author and not of YourStory.
Blockchain was introduced to us in the year 2008 by Satoshi Nakamoto. Since that time, blockchain has turned into its very own industry. It has likewise profoundly affected every other industry out there. In any case, in spite of the way that they’ve been around for over more than 10 years now, there are still a few misconceptions and misguided judgments about blockchains – particularly among people who are new to the blockchain. With the fame of blockchain innovation ascending, there come numerous misinterpretations. This, in turn, can deliver false certainties that spreads wrong knowledge. So let’s have a look at some regular misinterpretations of this progressive technology.
- ‘ Blockchain = bitcoin ’
- Usage of blockchain is limited to cryptocurrency
- Every transaction in blockchain is Anonymous
- Smart Contract is equivalent to legal contracts.
- All Blockchain are public in nature
- Tokens and coins are one and the same
- Blockchain is free of cost
Let’s discuss them one by one.
- ‘ Blockchain = bitcoin ’: The most common misconception is that Blockchain and bitcoin is one and the same thing. If I have to explain their difference in one sentence then I would have said: “Blockchain is a technology and bitcoin is a cryptocurrency, Period!” To learn more about this in detail refer to our blog which has an in-depth explanation about Blockchain and bitcoin.
- Usage of blockchain is limited to cryptocurrency: There is no doubt that blockchain and cryptocurrency work fabulous together. But blockchain’s usage is not limited to just finance. It covers many industrial areas such as healthcare, automobile, supply chain, real estate, government etc.
- Every transaction in blockchain is anonymous: The greater part of the world’s best cryptocurrencies, including Bitcoin, has been based on the supposition that every cryptographic money holder would be pseudonymous. This implies transactions can be followed to an open key. Which is a 256 piece encoded string, gives access to all exchange history and data for that token holder. Pseudonymity takes into account clients to stay mysterious as required. However, digital currency can be followed if there is any occurrence of unlawful use.
- Samart Contract is equivalent to legal contracts: Smart contracts are simply lines of code that execute activities naturally when certain conditions are met. Hence, they are not considered as legal contracts from a legitimate viewpoint. They can be utilized as proof of whether a specific condition has been accomplished or not. Regardless of their questionable lawful esteem, they are extremely amazing assets, particularly when combined with the Internet-of-things. For an in-depth explanation refer our blog on Smart Contract.
- All Blockchain are public in nature: Private blockchain also do exists! In private blockchains, just explicit, pre-picked entities can make transactions on the chain. Therefore, a private blockchain is a closed system that offers constituents the advantages of the innovation, yet isn’t really decentralized, even among its individuals.
- Tokens and coins are one and the same: Tokens and coins are interchangeably used sometimes, but they are actually different. Be that as it may, there are extremely huge contrasts between crypto coins and crypto tokens, so it’s essential to comprehend what they are! The coin has an advantage that is local to its own blockchain. Consider Bitcoin, Litecoin, or Ether. Every one of these coins exists without anyone else blockchain. They are commonly utilized similarly as a genuine coin is – as cash. You can consider coins like Bitcoin, Litecoin, and Monero simply like the coins in your wallet or piggy bank. They don’t fill some other need than to be utilized as cash. Tokens are digital assets, issued by a blockchain-based project, which can be utilized as a payment method within its system, performing comparative capacities with coins. Be that as it may, the fundamental contrast is that it likewise gives the holder a privilege to take part in the network. Tokens can likewise play out the elements of a digital resource or represent a share in the company.
- Blockchain is free of cost: Developing a blockchain includes various PCs for numerical calculations to concur a last permanent outcome. Each block in blockchain requires a ton of energy to solve, which can be costly.