Although Blockchain technology has become a critical priority for many organizations, there are still many blockchain misconceptions that strongly affect the implication of blockchain.
What is Blockchain?
Blockchain technology is a ledger that records and stores information of transactions. A blockchain is a database organized into a chain of information blocks, allowing the development and the expansion over time.
This means that whenever there is new data, new blocks will be formed. When each block is loaded into the ledger by using their corresponding hash codes (which set the blocks apart from each other), it is linked to the previous block. This constitutes a completely trackable and unforgeable record with blockchain technology.
That is a basic concept of blockchain. In fact, however, when you want to get down this technology to your business, there’s much more to know. Here are some misconceptions about blockchain technology that akaChain has learned after working with a wide range of customers.
Misconceptions about Blockchain
- Blockchain means Bitcoin
It’s a fact that most people know about blockchain technology through Bitcoin, when the cryptocurrency was first announced by Satoshi Nakamoto in 2008. However, Bitcoin or other cryptocurrencies is just one among other applications of blockchain technology.
Although still in its first stage of evolution, Blockchain is now widely applied in different sectors, such as: finance, logistics, insurance,… According to Deloitte Insights, blockchain solutions are among the top five strategic priorities of organizations. This strengthens its most influential technology position nowadays and companies should be ready for it.
2. Blockchains are public only
Using a blockchain platform allows developers to easily create their own blockchain application that interacts with blockchain technology for their business.
Based on their accessibility, blockchain platforms are divided into 3 types: Public, Private and Permissioned.
- Public: everyone can become a node, join the network, read and write data on this blockchain platform.
- Private: allow people to read data only, no write permission. Because it belongs to an absolutely reliable third-party who decides every change on your application. Authenticating time is quite fast due to a small number of devices participating in the transaction.
- Permissioned: A form of Private Blockchain, but only permissioned people can read it.
Follow these three types of blockchain platform, you can wisely consider developing proper blockchain application to your business at first step.
3. We should use blockchain rather than traditional database
Although blockchain has a lot of advantages, it’s not perfect until now and can’t totally replace traditional databases. Here are some comparisons:
- Basically, blockchain is considered more secure because it performs based on immutability, meaning input information can not be changed once a block has already been validated. Traditional databases, in contrast, are customizable by the administrator depending on business requirements.
- About transaction speed and volume: Blockchain does not show its strength when it comes to high volume transactions, while traditional database is designed for both high volume transaction and data analytics.
4. Blockchain is 100% secure?
The answer is no. This could happen, in theory, if it had enough the majority of hashing power.
There’s one thing called a “51% attack” (most common in bitcoin transactions until now) that when someone or a group controls more than 50% of the network’s hash rate or computing power and interrupt transaction network. This group can reverse transactions created before and this leads to a “double-spending” or even deny transactions,…
In fact, there’s no 100% secure technology because there’s alway someone/group out there wanting to cheat and take benefits from technology bugs.
5. Blockchain is free
Although blockchain transactions are free, there’s still an infrastructure cost. In order to validate transactions, it requires a huge amount of power and energy to calculate. All that energy costs money. However, this fee is much less than when using the conventional methods.
Blockchain truly has shown its potential and taken big steps since its first release.
However, blockchain is now still not fully growing and there are many difficulties in terms of concept, development, and deployment to real business.
akaChain, as a reliable partner, is always ready to provide you consult and experienced developers to help you to build a blockchain application that is appropriate to your business process.
Contact us for more information:
Phone: +84 962 516 915
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