It’s not surprising that a revolutionary invention such as the blockchain and Bitcoin would attract various myths and mistruths concerning its features and usage. This article explores 5 common myths about Bitcoin and the blockchain.
Myths Vs. Facts
1. The Blockchain Is a Great Data Storage System.
Many people believe that the blockchain would be fantastic for storing large amounts of data, however, that’s not so. The blockchain system is distributed in such a way that every node in the system has a copy of the blockchain. If huge amounts of data are stored on the blockchain, the blockchain becomes huge and each node has to replicate the huge blockchain creating inefficiencies. The blockchain is perfectly ideal for recording transaction data. Hence the description, a distributed ledger.
2. The Blockchain is Secure
Whenever the term secure is being used in reference to a system, the first thought that comes in mind is impervious to hacks. Many people have the notion that the blockchain is hack proof however that’s not the case. Many people see the blockchain as a place where they can store vital information like bank details, social security number and many more, however, they fail to remember that the blockchain is a network and everyone on that network can view information that’s part of the blockchain. Therefore anyone on your blockchain would be able to view any information you store. The term secure that comes with the blockchain refers to immutability of data stored on the blockchain. This simply implies that any form of data stored on the blockchain cannot be messed with and changed hence its a system that encourages transparency and accountability.
3. Bitcoins are Expensive
As one today, the price of 1 Bitcoin is well over $12K. Statistics like this get people thinking that Bitcoin is expensive and they can’t afford to use it. However, what people don’t know is that Bitcoin is divisible and it is possible to purchase a fraction of 1 Bitcoin. One can purchase one-hundredth of a Bitcoin. Bitcoin even has smaller units called satoshi.
4. There’s Complete Anonymity with the Use of Bitcoin
Many people often believe that with the use of Bitcoin there’s no way to trace the user or acquire information about the user. This makes people associate Bitcoin with fraudulent activities however this is not entirely true. While there’s a level of anonymity to the use of Bitcoin, it’s not impervious to tracing. Even transaction leaves a hash behind a pattern that the blockchain registers and that pattern can be traced to a user. Platforms that use Bitcoin sometimes require some information about users, exchanges, for instance, take personal information of their users.
5. Bitcoin is a Scam
This is perhaps the greatest accusation Bitcoin has faced. In an article published on the Vox, it stated Bitcoin is the greatest scan in the world, a colossal pump, and dump scheme. In addition, many platforms have used bitcoins to scam people hence placing the red flag over Bitcoin as a digital currency. However, what they fail to realize is that Bitcoin wasn’t what scammed them but was just a protocol used to scam them. To alleviate their fears, over $150 billion of global capitalizations is in bitcoins and honestly speaking, how would some governments legalize something that is a Scam.
Myths about Bitcoin and the blockchain have spun as the technology gained popularity. It’s important to get accurate information rather than getting misled. We advise our readers to do their own research before making any final conclusions on any issue or topic.