Okay, so if you haven’t heard of blockchain technology — or at least Bitcoin — at this point, then you’re probably living under a rock somewhere.

Blockchains are the relatively new technology behind huge fad cryptocurrencies like Bitcoin. But they’re so much more than just instruments of digital finance.

People have begun finding potential corporate applications for the technology, such as tamper-evident records, real-time demand-supply matching, audibility, distributed operations, and much more.

The power of blockchains lies in them allowing digital information to be shared among a network of participants while maintaining a high degree of integrity insurance.

They’re encrypted databases of agreements, so to speak. This means that once a “deal” has been made, neither party can go back to rewrite the terms.

However, blockchains aren’t a single entity or technology — they’re an architectural principle that have several defining characteristics.

Blockchains have gained so much momentum over the last few years, earning enough buzz that mainstream pundits are claiming that 2017 is the major year for the platform.

Like the misconceptions that came with the rise of the smartphone and the internet, the myths surrounding blockchain technology are equally worth debunking…

Myth No. 1: There’s Only One Blockchain

Media coverage of the blockchain could make it seem like there’s only one big blockchain — similar to the internet.

This isn’t at all true.

There are many different blockchains, and each one has been carefully designed and created for a different purpose.

There are big public blockchains, like Bitcoin, that anyone can participate in at any level. There are also semi-open networks, like with cryptocurrency Ripple, that require some screening in order to participate.

What’s more, there also exists completely private networks that are only operated by known, vetted parties.

Myth No. 2: It’s Just a Fad

Like the internet, blockchains are here to stay.

I smile when I hear people say blockchains are just fads and won’t be around for long.

I’m sure similar people made similar comments about the internet right after its inception.

Although blockchains are still in their very early stages of development, many people compare their maturity today to where the internet was in the early ’90s.

But in truth, they aren’t that far along yet. They’re currently in the rational assessment stage.

So, their mass adaptation isn’t imminent — yet.

Myth No. 3: Blockchains’ Records Can Never Be Hacked or Altered

One of the main selling points of blockchains is their inherent permanence and transparency.

When people hear this, they often think it means that blockchains are invulnerable to outside attacks.

No system or database will ever be completely immune, but the larger and more distributed the network, the more secure it’s believed to be.

What blockchains actually provide to applications that are developed on top of them are ways of catching unauthorized changes to records.

Complete guaranteed immutability isn’t technically possible. But blockchains could be made prohibitively expensive and economically unattractive to tamper with.

History can indeed be rewritten in some cases due to errors, fraud, bugs, etc.

Myth No. 4: Cryptocurrency Is Used for Untraceable Black-Market Transactions

There’s been a long-held belief that cryptocurrencies are only used for black-market purposes.

While it is true that Bitcoin and other cryptocurrencies can be used for such nefarious activities, it’s ignorant to assume that they’re solely untraceable underworld enablers.

For a public ledger like Bitcoin’s blockchain, there’s always a record of every transaction. And in fact, that immutable and public record is, essentially, why it was built.

Thus, all transactions may be traced back once a user leaves the cryptocurrency world to cash out in the real world, regardless of the purpose of the transaction.

Myth No. 5: Blockchains Have No Business or Commercial Applications

Blockchains are often associated with the transfers of value.

However, the very nature of their design — secure blocks of information, verifiable data, and permanent records — creates a model that could be used for any sensitive data.

A good example of this usage is with patient medical records: Data often need to be sent from a provider to a range of different recipients, including insurance companies, referrals, and other departments within the same facility.

This data includes things like medical histories, social security numbers, and insurance information.

Blockchains provide means for accessing and transmitting these records securely and privately.

The Bottom Line

By debunking some of the many myths surrounding blockchains, executives could begin to grasp the paradigm shift that blockchains may provide to an array of sectors — and, perhaps, most importantly, why the mainstream has started exploring them.

Technology analysts are already discussing the ways in which blockchain technology will reshape online security.

All of this boils down to one crucial and critical point: Blockchains are becoming an important piece of how we’ll all handle business in the future.

That’s all for now.

Until next time,

John Peterson
Pro Trader Today