Despite the fact that everyone’s talking about the blockchain, many have the wrong idea about the capabilities and purpose of this technology.
Even in 2017, the hype around the blockchain was just huge. People believed that this technology will affect all sectors of the economy, will change the face of our planet and along the way will bring millions of investors in ICO.
All the hype has led some to believe in the absolutely crazy ideas about the blockchain and its possibilities. Many people have a wrong idea about the potential of this technology — they consider it to be what it actually is.
The blockchain is just a database with some distinctive features. It allows multiple users to record and share information in real time, while the parties are not required to trust each other, as the correctness of entries is controlled by the members who receive remuneration in the form of tokens/coins. These features are very specific and really only useful in certain circumstances.
For example, they are great for cryptocurrencies like bitcoin is its blockchain allows you to send money to anyone in the world with minimal cost without the need for a Bank or other intermediary.
However, the block chain is not really suitable for storing all types of data and certainly should not be used to solve contrived problems.
Today we will talk about 10 common myths in relation to blockchain and its applications (like bitcoin) as from haters, and from the ardent enthusiasts.
1. Bitcoin is the biggest Scam in history, not “rat poison”, and he’s not dead
In 2017 against cryptocurrency were made by some well-known financiers, including Warren Buffett, Charlie Munger and head of JP Morgan Jamie Dimon.
Yes, the blockchain based on bitcoin like any new revolutionary technology — have their drawbacks. The mechanism of consensus proof-of-work consumes huge amounts of electricity; cryptocurrency is actively used for speculation and illegal activities.
But to say that this technology will fail — it’s like that in 1995 to declare that the Internet will not work because it is clumsy and disorganized.
Bitcoin is alive and well for 10 years, though he has repeatedly predicted the demise. At first glance it may not seem credible, but says Navale Ravikant:
“Bitcoin is a tool for the liberation of humanity from the oligarchs and tyrants, served as a get rich quick scheme”.
Concentrating on the shortcomings of this technology and calling bitcoin a Scam, we completely forget about its merits and potential.
2. The blockchain will not increase the stock value of your company
Kodak, Long Island Iced Tea and On-line Plc — excellent examples of using the hype around the blockchain to enhance the value of the shares. While none of the companies is irrelevant to the technology.
3. The blockchain is not a pyramid scheme
Although the financial pyramid on the basis of this technology meet. For example, PonziCoin is a typical Ponzi scheme (and do not bring about Bitconnect).
4. Cryptocurrencies is not just for scams
There have been many cases when the investors and the company suffered from hacks and scams. This is a big problem for the industry, but not a sentence. Anonymity is one of the main advantages of the blockchain allows hackers and fraudsters go unpunished. But it’s an unfortunate side effect of technology, not its task.
Terrorist groups like ISIS (banned in Russia) are looking for new recruits on social networks, but this does not mean that we should abandon Facebook and Twitter.
Pablo Escobar was so rich that burned American dollars, trying to warm her daughter. The whole drug industry depends on cash. Does this make them bad?
5. The blockchain is not designed for fundraising
The fact that some unknown company has raised during the ICO millions of dollars, does not mean that her behavior should copy.
The purpose of the ICO is not only a fundraiser, but also the distribution of tokens among potential users of the project. In the end, they should perform any function. If a startup has no relation to the blockchain, then the need for the tokens disappears. You should not use them to banal to raise funds.
6. The blockchain will not change your business
If the company is not experiencing a real need for the benefits that can offer the blockchain, it is better not to mess with him and store data the old fashioned way.
7. The blockchain won’t change everything industries
Heard the phrase “It’s like Uber for (certain industry)”? It’s funny, but it penetrated even into the ecosystem of blockchain. Some companies are literally trying to create Uber on the blockchain.
A small problem with this idea is that not every industry requires the blockchain. Let’s say you don’t like the attitude of Uber employees and instead switch to Lyft, you invent a solution on the blockchain?
“A decentralized, peer-to-peer network for taxi” — sounds really cool. But that idea completely ignores all the flaws of the blockchain.
By definition there is no Central authority that manages public bloccano. Who will make the decisions in this company? What about dispute resolution? Once the data was loaded into the block chain and verified, they cannot be changed. Paid for the trip, which didn’t do? The driver behaved disgusting and need to tell about it? Alas, you are not lucky, because there is nobody to complain.
And what about development? As a distributed company with no managers will compete with one of the richest startups in history, with well established market share?
Even if a decentralized Uber will be able to overcome all challenges and to create a working service, how it will be better than usual? Uber and other similar centralized app already work well enough. The alternative will probably fail to exceed them.
The potential benefits from the transfer of many existing industries on the blockchain is not high enough to make users decide to change your habits.
8. The blockchain is not designed for sacrifices of Cthulhu
We’ll just leave this link here and we will not go into details.
9. Blockchain is not a platform for memes
Dogecoin the famous cryptocurrency meme. It was created on the code base of bitcoin in 2013 as a joke, but this did not prevent its market capitalization grow to $ 2 billion last year.
10. The blockchain is not useless
Unless, of course, the token on which it is based was created so intentionally.
So what is the blockchain?
We have listed all the cases for which the blockchain is not suitable. Now it’s time to talk about the scope of its potential applications. The blockchain will fit perfectly in the project that requires:
- Distributed and immutable database;
- Support multiple recording;
- Does not require trust between the parties;
- Capable of eliminating unnecessary intermediaries;
- Able to build consensus and validation.
Money fit perfectly into this category. Such cryptocurrency, such as bitcoin, meet the above criteria and go perfectly with bloccano.
Unfortunately, at the present time there are not so many other areas that are suitable for mass application of the blockchain. This does not mean that they never will — we just haven’t found them yet.
Summarizing, we can say that the blockchain is a useful technology, but it is not the Savior of business, Economics, or humanity. We all need to know about the true potential of this technology and understand what it can actually achieve.
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