A Blockchain is a transparent and publicly accessible ledger that is shared among a network of computers called Blockchain Network. It contains a growing list of records called blocks that are linked in chronological order to form a chain. The data is secured using public key encryption which resists the modification of information. Thus, data stored in blocks can be viewed or accessed by the users but it can’t be tampered with. This advantage has led to a rapid growth of Blockchain technology.
However, with the growth of Blockchain technology, some myths and disillusions have also developed around it. Following are some common myths surrounding Blockchain technology:
- Blockchain Is Same As Bitcoin: Blockchain is the root technology for bitcoin; but they are not interchangeable terms. Blockchain is a technology that allows recording of peer-to-peer transactions on a distributed ledger throughout a network. However, bitcoin is a cryptocurrency. It is used to make direct exchange of currency between two people omitting the involvement of a third party such as a bank.
- Cryptocurrency Is The Only Application Of Blockchain: Cryptocurrency is a major application of Blockchain, however the technology has numerous other applications. Some common applications of Blockchain include monitoring supply chains, data sharing, digital ids, copyright & royalty protection, etc.
- Information On Blockchain Activity Is Not Public: A prevailing misconception about Blockchain technology is that the information on the ledger is hidden. On the contrary, reality is that the information can be viewed by anyone. Users can connect their computer to the Blockchain network and receive a copy of ledger on their system. This copy is automatically updated whenever a new block is added to it.
- Cryptocurrency Transactions Are Anonymous: It is a misconception that crypto transactions are anonymous. In actual, cryptocurrency transactions are recorded in a public ledger and many government agencies tie up with numerous cryptocurrency exchanges to access the ledger & map the address back to the owner.
- Blockchain Is Fundamentally A Storage Mechanism: Most users consider Blockchain to be essentially a storage mechanism. Undoubtedly, it offers unparalleled advantages for data storage; however, the technology has other advantages such as facilitating convenient exchanges.
- Tokens & Coins Are Same: Tokens and Initial Coin Offerings are two important terms used in Blockchain terminology. They are often confused to be same but there is an inherent difference between these terms. Coins store simple values; whereas, tokens are used for storing complex levels of value such as property, utility, income, etc.
For more information on Blockchain Technology and its applications, contact Centex Technologies at (972) 375 - 9654.