Before, we debunk some of the most prevalent myths about the blockchain technology and the magical – Bitcoin, we need to know how this revolutionary technology took over the geek world by storm. Also, how it actually works.
What is a blockchain?
Let’s just get down with the basics. The nitty-gritty details can wait! A blockchain at its core is a digital ledger system. It’s decentralized, it keeps a record of all the payments and transfers transactions in an efficient manner.
Data is stored in blocks, these blocks are linked cryptographically to make a chain, in such a manner that it’s impossible to change the data of a particular block, without altering the data of the previous blocks in the blockchain.
Myth 1: Data is completely secure on a blockchain
It’s time to really get your geek on! For instance, if the blockchain is public then the data stored is visible to everyone in the blockchain network. Yikes! Thus, the idea that you can store your password, social security number and other important details without being hacked, is the same as some fries short of a happy meal.
The word “secure” is pretty deceiving. Over here, it just means its simply immutable. In even simpler terms, it implies that the data cannot be altered without being someone aware of it.
Myth 2: Bitcoin are digital coins.
Seems like it, but if you really put your mind to it and begin to wonder. It seems odd and doesn’t make sense. Truth is, Bitcoin is basically a transactional record. Sounds confusing, we know. In short, its super important to understand that a bitcoin wallet does not consist of digital coins. Instead, it contains a cryptographic key (address) which enables you to spend your Bitcoins and is not storing any Bitcoins. So, forget that they are jingling in your wallet and look at them as a key.
Myth 3: Store the data away.
Couldn’t be more inaccurate. The blockchain is known for its efficiency. If the blockchain is begun to be used for storing images, videos and all sorts of heavy files. This will make the size of the blockchain huge, making it extremely inefficient.
The reality is, it’s great for recording all the transactional data. Anything more than that would just disrupt the entire purpose of the blockchain technology.
Myth 4: Bitcoin is a threat to the government.
Bitcoin is its own enemy! How come? Well for one reason only, because of its scalability issue. It can process only 7 transactions per second. While the Ethereum, the second largest cryptocurrency can only manage 20 transactions per second. What a bummer!
In comparison to Visa, which can process 1667 transactions per second. Bitcoin is far behind and its because of how each block approximately needs 10 minutes to be generated. Hence, its only good for transactions that do not require urgent transaction confirmation. So, the government has nothing to afraid of because the scalability issue leaves Bitcoin in a pickle!