Have you ever heard people talk about blockchain facts vs myths a little confused? Perhaps you heard it is merely hackeer-only, or it is too complicated to learn. I am somebody who felt the same way!
I would now like to tell you what I have learned. Imagine this as a case of friendly conversation and we uncoer the actual blockchain realities and legends. Simple words, short sentences, and simple ideas will be used. At the conclusion, you will stop viewing blockchain as an intimidating technological monster, yet you will see it as an interesting and potent tool.
What Exactly is Blockchain? A Super Simple Explanation
Now that we are going to address the myths, it is time to clear one big fact.
Imagine a digital ledger. What's a ledger? It is nothing but a fancy name of a record-keeping book, such as the one you may have to keep of your comic book collection.
Suppose this ledger was not stored at a single location. It is replicated and distributed into thousands of computers globally. Whenever a person records a new transaction (such as, I sold my Spider-Man #1 to Batman #5), it will be received just as quickly on everyone's copy of the ledger.
- Block: A collection of transactions (such as a page of our ledger book).
- Chain: Every new page is properly attached to the previous page.
- Blockchain: A chain of such pages, which are distributed to all.
This renders it extremely difficult to cheat. And even in case I attempted to reprint my page and make it say I kept Spider-Man #1, the thousands of copies that were the same would not agree and would revolt against the change. That's the core idea! It is everything regarding transparency and security.
Common Blockchain Myths: Busting the Biggest Stories
There are a lot of misconceptions about blockchain myths, which are not true. It is time to shed some light on these tall tales!
Myth 1: Blockchain is Just Another Word for Bitcoin
This is likely to be the most widespread misunderstanding!
The Myths: Bitcoin and blockchain are used interchangeably.
The Fact: Bitcoin is an electronic currency (a cryptocurrency). Bitcoin would not be possible without the technology that is known as blockchain. Think of it this way:
The application (similar to a game on your phone) is the Bitcoin.
- The operating system, through which the app runs (such as Android or iOS), is known as blockchain.
- The opportunities of blockchain technology are far more than digital money, which we will discuss later!
Myth 2: Blockchain is Only for Criminals and Hackers
This myth is based on juvenile tales related to the use of Bitcoin in the dark web.
The Myth: Blockchain is a dark Web weapon.
The Fact: Although there are those who have done bad things with it just as the people have done bad things with cash or internet, the technology is not criminal. Actually, it is transparent hence it is excellent in combating crime! Since all transactions are registered on a publicly accessible registry, it is literally easier to trace the money trail of the same than when dealing with cash. It is not what you use but how you use the tool.
Myth 3: Blockchain Transactions are 100% Anonymous
People can feel that they should not even think of trying to comprehend this myth.
The Myth: You must be a computer guru or a math genius in order to get it.
The Fact: You do not have to know how to construct a car to know how to drive a car. Likewise, you get to know what is blockchain and why it is valuable without having to figure out the complicated mathematics. The applications, which are based on blockchain, are getting simpler to utilize on a daily basis, as the web did with the initial internet browsers.
Powerful Blockchain Facts: The Amazing Truth
Now for the fun part! We should consider the amazing things that blockchain is already accomplishing.
Fact 1: It forms final trust Decentralization
This is the all-powerful blockchain.
In a normal scenario, we require a trusted middleman in things. We require a bank when sending money to a friend. We need a government office to demonstrate that we have a house.
Blockchain changes this. It's decentralized. This implies that it is not controlled by any individual company, government or individual. The computer network collaborates in order to authenticate transactions. This builds a technologically created trust rather than an institutionally created trust. It is a new concept of trust!
Read more:- Blockchain Supply Chain Startups
Fact 2: It’s Nearly Impossible to Change or Hack Data
Blockchain security is a legend.
Keep in mind the connection between the blocks, one to another? Any modification of information within a single block would alter its distinctive digital signature (also known as a hash ). This would interrupt the chain and the whole network would be aware of it. A bad actor would have to modify every single copy of the ledger on more than half the computers in the network simultaneously to be successful in hacking it. This is too tough and costly such that it is nearly impossible. This is called immutability.
Fact 3: It’s Being Used in Way More Than Just Money
It is at this point that it becomes very exciting! Here are some cool uses:
- Supply Chains: Blockchain is used to track food by companies such as Walmart. In case of a recall of lettuce, they can do it in a few seconds rather than days to know the farm where it was grown.
- Healthcare: The blockchain could be used to keep your medical records safe. It would be safer and quicker than the current fax systems to allow doctors to access them instantly.
- Voting: Voting is one area where blockchain is being experimented. This would help to conduct the elections safely and enable citizens to vote via their phones knowing that their vote was registered properly.
Art and Ownership Artists are exploring blockchain to issue digital certificates of authenticity to their work. This proves the ownership of a special digital image (referred to as an NFT) and the artist receives compensation in case of resale.
How Does Blockchain Technology Actually Work? A Step-by-Step Story
We are going to trace a money transfer so that we can watch the magic!
- A Transaction is Requested by someone. Alice may wish to send Bob 5 digital coins.
- The Broadcasting of the transaction takes place. This is an appeal forwarded to a group of computers (known as nodes).
- The Network Validates It. The nodes ensure that Alice holds sufficient coins and the transaction is valid. They solve complicated math puzzles in order to settle on the truth.
- A New Block is Created. The validated exchange is combined with the rest of them into a new block.
- The Chain is Added to the Block. A special cryptographic hash is assigned to this new block and it is inserted irreversibly into the current blockchain. The deal has been closed!
- The Accounting Reckons Entirely. All the copies of the ledger present in the network are updated. Bob gets his 5 coins and the balance of Alice is taken away.
The entire process brings everybody to the same page, at all times.
Concluding Reflections: New Knowledge
We've covered a lot of ground! We have shattered big myths and found availing facts. It is now clear that blockchain is much more than Bitcoin. It is a ground breaking trust, security, and transparency building technology in our digital world. It is not only of the tech experts, or even the criminal, but of all.Its difficulties, such as energy consumption, are already being overcome by clever individuals. The future of blockchain has been enormous and it is emerging in such industries as farming, art and healthcare.
Thanks for learning with me! I trust that this tour in the blockchain facts vs myths was enjoyable to you as it was to me.
Frequently Asked Questions
Q1: Can blockchain be hacked?
Although it is highly improbable to breach the blockchain, as with any online bank account, the apps and exchanges on top of it such as cryptocurrency websites may not be secure. This is the reason why it is very important to use powerful passwords and security.
Q2: Will investing in blockchain be akin to investing in cryptocurrency?
Not exactly. To invest in cryptocurrency, it is necessary to purchase such coins as Bitcoin or Ethereum. The investment in blockchain may imply an investment in the blockchain technology firms that create and utilize blockchain to conduct business.
Q3: Does blockchain negatively affect the environment?
This is a great question. Proof of work method consumes a lot of power in some blockchains (such as Bitcoin). Nonetheless, numerous emerging blockchains rely on the so-called Proof of Stake and other approaches that consume over 99 percent less power. The technology is being made very green!
Q4: Does blockchain eliminate banks?
They will not be substituted, but it is certain to alter their working methods. To make their own systems faster, cheaper, and more secure, Banks already are looking at blockchain. It is more of evolution than revolution.
Q5: What is the best way to begin using blockchain?
The simplest option is to have a convenient application based on blockchain technology. This may be an app of payment, a game, or a digital art creation platform. You should always make your research so you can pick a word of mouth and secure platform.