Blockchain is a useful technology that has shown many remarkable uses. But many people concentrate only on the upsides of the technology, forgetting to take a sober view of things. Let’s take a look at some of the myths prevalent in the audience and what it actually stands for.
- Miners provide network security
Blockchain enthusiasts may argue that miners maintain the stability and security of the Bitcoin network and not just perform useless operations, but the problem is that miners only protect Bitcoin from other miners. Bitcoin solutions are also prone to attack. A person controlling more than half of the computing power currently being used for mining can surreptitiously write an alternative financial history as well. If executed, it becomes possible to spend the same money more than once.
- Block chain is decentralized and indestructible.
Independent miners merge into pools who merge on the assumption that it’s better to have a small but stable income than a huge payoff maybe every thousand years. The top 4 largest mining pools control more than 50% of all computing power. Someone can gain the ability to double spend the bitcoins by gaining access to just four controlling computers. The threat becomes even serious because majority of pools along with their computing powers, are located inside one country.
- The anonymous and open character of the blockchain is a good thing.
Blockchain offers pseudonymity, which can be bad for honest users. Transferring bitcoins to someone can also provide them access to your past transactions, thus making the other person know everything about your finances. While it can be tolerable for an individual;, it can prove lethal to the companies.
Cryptocurrency giant Bitcoin has competitors that tried to solve some of these problems, but they are still based on the blockchain. Therefore, the next time someone tries to reason with you over these bitcoin myths, you can easily counter them.