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Living in the rapidly evolving tech-driven economy, it has become imperative to understand the impact of transformative technologies that are disrupting the global business environment. And whenever we talk about such innovation, Blockchain is one subject that invariably finds its way into discussions and debates. The amount of information surrounding this emerging technology is endless and sure to cause information overload. While it continues to find a firm footing, the uncertainty surrounding its value addition has also raised a lot of misconceptions and speculations.
Let’s find out the myths surrounding this disruptive innovation and bust them right away.
Myth #1: Blockchain, bitcoin, and distributed ledgers are all the same.
Fact: First, let us get the basics straight. Blockchain is a type of distributed ledger technology that is open and can record transactions between users involved. Each such transaction is encrypted and linked to the other, forming a chain of data. The encrypted transactions can only be accessed using a digital key. Blockchain architecture facilitates the distributed ledger ecosystem but not all distributed ledger architectures are called Blockchain. And Bitcoin is a cryptocurrency that uses the technology of Blockchain and not its substitute. Blockchain has been largely used to add value to managing cryptocurrencies, but its functionality is not limited to cryptocurrencies.
Myth # 2: Blockchain is only relevant to finance
Fact: Extending our understanding from the previous point, it would be wrong to say that Blockchain is only relevant to the financial ecosystem. Although it started with managing cryptocurrencies and many other functions in electronic transactions, Blockchain’s architecture has the potential to do a lot more. As we speak, Blockchain is already permeating into other industries like food, retail, healthcare, and even non-profit, and revolutionizing business functions across manufacturing, supply chain, sales, and marketing. Once the technology is perfected to yield the best output, it won’t be long before this transformative technology will reinvent every business operation and become an essential tool for growth and expansion.
Myth #3: Blockchain is a high-risk technology
Fact: Many people have a notion that Blockchain provides an open playground for illegal activities. But truth be told, so is the case with every possible technology that is available to us today. There is no failsafe option. But it would also be wrong to say that Blockchain is high-risk. The architecture is used for all legitimate and legal operations, like any other tech infrastructure. In fact, the way the data chain is designed in Blockchain, it makes it difficult for hackers to break through each chain, without leaving a footprint on the code. Also, on tampering with each data chain, it will only yield inaccurate data on the next. So, if we cut through the inner workings of this technology, it appears to be quite safe.
Myth # 4: Blockchain can solve every business problem
Fact: Business problems cannot be solved with miracles. It takes a solution-centric, strategic approach, the right tools of technology, and a comprehensive system that can support the solution. As such, there is no Kryptonite in technology that can miraculously solve every business problem, not even Blockchain. But what Blockchain can surely do is to become one of the tools for driving solutions. It can be used to address a particular business problem with positive returns. For instance, if you are struggling to restructure your accounting system, then this tech architecture might be of help and expedite your operations. But it will not solve the glitches in your accounting process or the software used.
Myth # 5: All blockchains are open
Fact: Yes, Blockchain does use the open-type distributed ledger system, but that is only one aspect of its functions. The open formats are used for cryptocurrencies, but many blockchain architectures run in a private mode and need permissions to access. Private blockchains are used for more sensitive business functions or more secure transactions that require access controls and selective authorization. Only those who have these permissions can access and share the data openly between them.
As vast and overwhelming it is, Blockchain is still exploring its complete potential for large-scale applications. And until it becomes pervasive enough, there’s bound to be questions surrounding its uncertainty. However, if one observes the current market trends, we can see developers, entrepreneurs, investors, and tech giants investing in harvesting the potential of Blockchain technology for driving the next phase of business growth. And the time is just about right for developers to equip themselves with a deep expertise to become proactive contributors to the growth of organization-wide Blockchain adoption.
