There is no denying that in today’s age, blockchain technology has several positive aspects. However, on the other hand, there is also plenty of confusion and misunderstanding about its inherent nature.
Keep reading to learn about the four most common superstitions about Blockchain in 2020.
Blockchain Technology is Tamper-proof
Blockchain being tamper-proof or immutable, is one of the most common superstitions about Blockchain in 2020. Under particular circumstances, network participants can reverse the transactions on the Blockchain network. When it comes to Blockchain, there is no such thing as absolute immutability. The myth that Blockchain transactions are tamper-proof originates from its data structure (append-only), which implies that you can only add data to but not remove it from the database.
However, in theory, blocks containing transactions can be reversed if sufficient nodes decide to join together. Compared to the public Blockchain, reversing transactions might be easier with permissioned Blockchain since with the former, colluding miners will have to spend cryptocurrency funds and/or computational power in order to do so.
In contrast, legal agreements and contracts that bound permissioned Blockchain actors are specifically designed to discourage collusion or any other misconduct. You can regard the Blockchain to be tamper-proof if ‘mining’ in a permissioned Blockchain is adequately decentralized with dissimilar motivations across distinct entities.
Blockchain is Free of Cost
Despite the common superstition people have, Blockchain in 2020 is neither efficient to run or economical– yet! It entails several computers that solve mathematical algorithms to decide on an immutable result that is final. Every blockchain block generally makes use of considerable computing power to solve. Moreover, someone has to pay up for all this computing power that supports the Blockchain network.
Blockchain is Fully Secure (100 percent)
Compared to other systems, Blockchain is not more secure automatically. Blockchains utilize cryptography for authentication, integrity verification, permission enforcement, and other areas. However, per se, just the application of cryptography does not make the system extra secure automatically. As permissions and data storage is distributed, the system might be more resilient. But if someone compromises the private keys of a few network participants, attackers can get full access to the shared database and can also reverse transaction history. Hence, the management of private keys is a primary challenge.
There is Only a Single Blockchain
This is another superstition that people tend to hold even today. The truth is that several distinct technologies have the name “Blockchain.” These technologies come in closed and open source, private and public versions, general-purpose, and customized to particular solutions.
The common thing between them is that they feature some kind of consensus mechanism. As a case to point, Bitcoin’s Blockchain, Hyperledger, Corda, Ethereum, and Microsoft and IBM’s blockchain-as-a-service can all be categorized as Distributed Ledger Technologies.