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The 5 biggest blockchain myths, debunked

Blockers technology of distribution has proved to be the greatest value of cryptocurrencies, with the possibility of revolutionizing almost every sector. However, many myths about what technology actually is and how it works prevent businesses from understanding their potential impacts and applications.

"Blockchains are used to revolutionize all types of industry, from retail to entertainment, to the food industry, health care, and even the non-profit sector," said Natalia Karayaneva, CEO of Propy . "The developers have been working on blockchain for many years, it's not new, yet it's still in its infancy and there's still a lot of progress in blockchain technology."

Here are five persistent myths about the blockchain and why they are false.

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1. Blockchain, bitcoins and distributed registers are the same thing

Bitcoin is a cryptocurrency that uses blockchain technology. Blockchain is a type of distributed ledger technology, but not all distributed registries are actually blockchain, said Michela Menting, director of digital security research at ABI Research.

"While the definition of distributed register technology is still questionable, the current dominant position is that they essentially require a legal identity with authorized nodes to validate transactions," said Menting. "As such, there are a number of companies that label themselves blockchain, but in reality they are only distributed books."

This is the case of the R3 consortium, which is one of the most important efforts in the financial services industry: it is not a blockchain, but a distributed ledger, added Menting.

2. Blockchain is a hotbed of illegal activity

Many people believe that the blockchains are full of illegal activities, said Karayaneva.

"Obviously, criminals can use the blockchain for illegal activities, but they can also use the motorways or the postal system to facilitate their crime," said Karayaneva. "Blockchains are used for legitimate, legal and necessary tasks, just like anything else, and not just for cryptocurrency trading, this is another myth as well."

Bitcoin is now recognized in many countries, including the United States as a commodity, and in others like Germany and Japan as financial and monetary instruments, added Karayaneva.

3. Blockchain will solve every business problem

One of the myths is that "blockchain technology is the new brilliant object that solves all business problems as a unique solution for everyone," said Gartner's colleague and vice president David Furlonger, and "Technology blockchain is the best technological solution available for a particular business problem and the net yield is obvious and positive. "

Companies also seem to believe that implementation does not require substantial organizational and operational changes, said Furlonger, and that the technology solutions of suppliers and providers are fully mature and ready to be widely adopted and manage risks, when we actually have a ways to go before this is the case.

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4. Blockchain technology is immutable and unattainable

Blockchains are susceptible to collusion attacks, in which one or more parties exceeding 51% of mining power could trick the network into accepting illicit transactions or other nefarious actions, Menting said.

"The challenge is that such an attack would require a large number of collusive parties and, in the case of Bitcoin, it would be almost impossible to reach," said Menting. "However, for some of the more recent efforts, with fewer participants, such an effort could succeed." Certainly, private and authorized blockchains and new applications on public blockchains are vulnerable to this type of manipulation. "

For example, in June 2016, criminals successfully hacked a DAO on the Ethereum blockchain, forcing key stakeholders and developers to overthrow parts of the blockchain and backtrack in a previous state, Menting said.

Even Blockchains does not fully guarantee privacy and security, he added. "The DAO hack shows that the blockchain is vulnerable," said the lie. "Whether through bugs in the code, or finding a loophole in smart contracts, there will always be interest from the bad guys to exploit it, and this interest will grow along with the popularity of blockchain."

5. All blockchains are open

Some blockchains are private and based on authorized formats, said Menting, in contrast to their open public relatives (in particular cryptocurrencies, like Bitcoin). Private blockchains have access controls and authorization requirements, he added. Between these parts, the data will be open and shared.

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Image: iStockphoto / ismagilov

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