Where crypto and blockchain technology is now at large I still see some people confusing the two. They would interchange the attributes which make it more confusing for them. If you’re going to jump into the market or just for the sake of learning so you don’t appear dumb in front of people, it’s important to understand what you’re getting into, especially if your money – and your intellect – is at stake.
Blockchain = Bitcoin
This is the most recurring misconception. People often associate Bitcoin with all things crypto which makes it confusing for people. Blockchain enables the peer-to-peer transaction to be recorded on a distributed ledger. Whereas, Bitcoin is a cryptocurrency that can be exchanged directly between two people without passing through a middle-man like a bank.
So, Bitcoin makes use of the blockchain technology, it’s the backbone on which Bitcoin relies.
The blockchain is only used for currency
Trust me, you’re not the only who thought this because I was in the same boat as you a couple of months ago. I didn’t fully realize a blockchain’s potential and the waves it has been making in various industries up until I started reading up on it. It is so MUCH MORE than just a replacement for fiat currency. You can read up more on how its changing various sectors like, sports, cosmetics, digital collectibles, etc.
Crypto transactions are anonymous
This might come as a surprise to most of you but many people are under the false assumption that all Bitcoin and crypto transactions are anonymous. Bitcoin is a public ledger and it tracks the amount that was sent from one address to another.
“Information is kept a secret”
People are under the misconception that it is not public. Contrary to the popular belief, much of the activity is traceable. But here’s, the thing though it’s advertised as a private ledger, there is some truth to this narrative. The thing is that you don’t necessarily have to provide your actual identity. Your existence is there but no one knows what form you exist in.
The volatility has us thinking…
Another common fallacy comes from the credibility of the blockchain. People believe that its volatile nature makes it a risky subject, I mean, sure, it is, we’re not going to deny that but to base the technology’s credibility on this one aspect seems a little harsh to me.
“It’s made for criminals”
It’s true that anonymity and decentralization are quite resourceful features but it is for law-abiding, citizens who are in an economically or politically unstable environment. If you’re stuck in a place that runs on corruption and you can trust the banks or if your country has a destabilized economy then its sane of you to turn to cryptocurrency. It’s arguably the best place to store your money.
“Cryptocurrency is for the geeks and the corporate world”
People have very little understanding of how blockchain works and they shy away from it. They assume that it’s only role is limited to these areas but if you try reading up more then you’d realize that it offers way more than you think. It will take time for people to place their trust in this organization.
“Blockchain will change everything about business transactions”
Then there are people who are on the other end of the spectrum, who blindly believe in the potential of blockchain and crypto that they lose touch of reality.
They tend to forget the difficulties that even crypto is facing, it is more process intensive, difficult to scale and takes more time to confirm transactions. It has its own set of problems with security as well.
The technology is a bit hard to comprehend at first which is why people don’t fully understand what it’s about. The complicated lingo and working are basically daunting for some people. But there’s nothing to worry about because we’re here for you!