June 4th, 2019
Since its creation, blockchain technology has faced numerous misconceptions. These misconceptions rise from different circles, some well vast with the technology and others with little or no knowledge at all. These misconceptions have led many astray from the greater picture and embracing blockchain use.
Blockchain, being one of the most recent technologies we have today, has provided more than many had hoped. From cryptocurrency technologies to providing solutions for supply chain and renewable energy, blockchain’s power is immeasurable. Recent answers by Jerry Cuomo, IBM Fellow and Vice President Blockchain Technology gave more light on what blockchian technology is really about.
Firstly, there is one misconception that blockchain equals bitcoin. This could not be further from the truth. This misconception is one that generated from when bitcoin first emerged. Those that are well vast with the technology know that bitcoin and other crypto form a small fraction of the entire blockchain system. Though there is more knowledge on these technologies, a few still cannot tell the difference.
Another common misconception is the belief that for an application to be true blockchain, it has to publicly, anonymous network driving the value around cryptocurrency. Then there is the belief that blockchain networks have to be completely public, permission-less network to be a blockchain in all variations. It is important to note that there is a big different between galvanizing blockchain into public or private, and in general confusing talks around “permissioned” networks.
People should stop assuming that permission equals private. For instance, some of the most vibrant public networks out there are permissioned. These include the Stellar Network, Sovrin Network, and Hedera.
Another common misconception is The Linux Foundation’s Hyperledger Project is the same as IBM. Despite playing a big role in creating the Hyperledger Project, IBM is not entirely responsible for the project. This project saw 190 other entities come together to create the solution. It is generally wrong to acknowledge one player in the team and leave everyone else.
While we are talking about the Hyperledger Project, people should also note that the Hyperledger community is not completely opposed to the Ethereum community. People should stop the notion that one has to belong in one or the other community. Generally, they both are about open innovation. In fact, both communities have already formed partnerships in different communities. Despite being completely different, Hyperledger community is focused on code and open source specifications, while Ethereum community is focused on specifications and interoperability, both find ways to work and bring innovations for their communities like the Token Taxonomy Initiative.
Lastly according to Cuomo another common blockchain misconception is that blockchains are not ready for enterprise because they lack a number of key elements such as security, privacy, and performance. While this might be the case, some of today’s best innovations are actually based on blockahin chain. Best examples created using this technology are permissioned blockchains and Hyperledger Fabric.
Recently, the University of Waterloo showed how Hyperledger Fabric nodes or peers could be re-ordered or re-assembled to streamline processing. This allows up to 20,000 transactions per second.
Some banking institutions are incorporating blockchain it their systems for better, services, secure transactions and utilizing all blockchain has to offer.
Other misconceptions not mentioned by Cuomo are there is only one blockchain and blockchain is just storage. Though one of the many blockchain uses storages, blockchain could be used for many other applications.
Notably, people should understand that smart contracts are not regular real life contracts on the blockchain. Smart contracts are programs that execute exactly as they are set up to by their creators and have no relation with legal contracts in real life.
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