Wednesday, 31 October 2018

8 Common Myths About Cryptocurrency and Blockchain

Blockchain is the distributed ledger technology which has gained the interest of almost every industry. Blockchain is a set of data records in disruptive nature. Cryptocurrencies are the digital currency based on blockchain technology. This young technology is in talks on all platforms and people have their own aspects too. Some of the things are just in the air without having any valid existence. You might have come across many too. Let’s have a look at some misconceptions about these technologies.

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Blockchain and Bitcoin are same


Whenever we talk about cryptocurrencies, the first term which comes in our mind is Bitcoin. Common people hardly know about blockchain and have a vision that bitcoin, cryptocurrency, and blockchain, all are same.

Blockchain is a technology which enables transactions to be recorded on the distributed ledger, however, Bitcoin is the virtual currency which can be directly exchanged between two parties. Bitcoin is based on blockchain technology.

Blockchain data is secure


This is the biggest misperception about blockchain. The misconception is that the data on the blockchain is stored in a way that it cannot be accessed by anyone. All the information on the blockchain is available publicly. All the activities can be traced. Blockchain is not safe to store data.
By saying blockchain is secure, they actually mean that the data present is immutable which means it cannot be altered by anyone.

Blockchain was developed for Bitcoin


Blockchain and cryptocurrency go together however cryptocurrency is just an application based on blockchain technology. Both have their own separate functionality. Cryptocurrencies use this technology, but it was not developed for any cryptocurrency or Bitcoin.

Cryptocurrencies are for criminals


Decentralization and anonymity are the factors to attract criminals however they are also a great feature for the ones who are in economically unstable conditions. This is probably the best place to keep your money if you do not trust your local banks.

Blockchain and cryptocurrencies are for finance and technology


This is one of the biggest myths that blockchain and cryptocurrencies are for finance and technology only. It is true that blockchain gained popularity with its first application which is cryptocurrency which has a direct impact on the finance field. People hardly know about the technology and fear to use it.

Blockchain is not reliable


This misconception comes from those who link the volatile nature of cryptocurrencies with Blockchain. The blockchain is not based on cryptocurrency, however, cryptocurrencies are just one application of Blockchain. Though the blockchain is new Technology, it’s a game changer. The technology has very well-established its base and will skyrocket soon.

Blockchain is for storage purpose only


Most of the people think blockchain is just for storing purpose only and is a storage mechanism. However, only a few people are aware that blockchain is associated with exchanging technologies which involve two parties, one to send and other to receive. Blockchain has applications beyond cryptos and has a wide range.

Token and coins are same


Coins and tokens are the same for most of the people except the ones who know the actual concept. Tokens and coins (initial coin offering) both are associated with Blockchain, however, both are different. A coin is a type of cryptocurrency which has one utility only to store its value. It functions on separate blockchain platform whoever token is dependent on platforms like Ethereum to function.

Blockchain and its business are growing rapidly. The myths and misconception are also running in the race. As they always say incomplete information is dangerous and if not dangerous, isn’t trustworthy for sure. Keep exploring, you never know it could be a part of your business too.