More and more innovative uses of blockchain technology are recently showing up. Banks, governments and even companies are assessing how to use the blockchain technologies but also sectors such as logistics, healthcare or media. The demand for greater understanding of this newly emerging decentralized technology is rising much faster than expected. However, there are certain myths and realities about it.
Blockchain is a continuously growing list of records – blocks – which are linked and secured using cryptography. Specifically, each block typically contains a cryptographic hash of the previous block, a timestamp, and transaction data.
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This modern technology is not owned by an individual or an organization. It is typically managed by a peer-to-peer (P2P) network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.
Transaction parties can now be directly connected and proceed in real-time exchanges of supply chain documents and transactions. Certainly, bitcoin is already being used as the means of payment and a mass adoption of blockchain has begun to occur in almost every industry.
However, Forbes presents four myths about blockchain technology and the reality behind them.
Myth: Blockchain is the same as Bitcoin
This is commonly misunderstood as blockchain technology is used in the bookkeeping for Bitcoin, so many believe they are the same thing. The truth is that cryptocurrencies are just one of many applications that can be run on top of blockchain.
Myth: Blockchain is public and anonymous
It is true that when blockchain is used for Bitcoin it requires no permission and is a public blockchain network in which anyone can take part. Nevertheless, this is just one of the blockchain models. In fact, there are blockchains that they do require some kind of permission, while big companies are starting to use blockchain networks in which only known entities may participate.
Myth: A blockchain ledger cannot be changed
As all parties have transparency into the transactions recorded in the blockchain ledger, this makes blockchain almost impossible to manipulate. However, there is still much work to be done to make sure that blockchain networks are secure end to end.
Myth: Blockchain mostly applies to finance
Despite the fact that when we talk about blockchain technology, most talk think of the financial services industry, there are many new uses for the technology that are appearing on a daily basis, such as:
- Tackling counterfeiting in supply chain: Companies are using private blockchain ledgers throughout their supply chains to tackle counterfeiting. With this measure, they can easily trace providence, chain of custody and transfer of ownership for end-to-end visibility.
- Electronic health records: By maintaining health records in a private blockchain network, medical professionals can request permission to access a patient’s record to serve a specific purpose and reduce possible mistakes.
- Improving data privacy: Recent cyber attacks, such as those against Cosco and Maersk show how highly vulnerable personal information is. With blockchain one can have more control over their personal information, giving access to the minimum amount of information necessary.
