Myths About Blockchains and Cryptocurrencies

warrior-sage (54)in #crypto • 6 years ago

Cryptocurrencies are a hot topic now and there are a lot of misconceptions about. In this article I have listed 5 of the most common misconceptions about blockchain and cryptocurrencies

1. Blockchain's Can Only Be Used to Create Cryptocurrencies.

This myth is very common now as the only place where blockchains are used is in the field cryptocurrencies.
This is not at all true as there are many real world applications, For example: The ODO meter in cars can be easily tampered and customers may end up paying more for a old car. This is know as ODO meter fraud
To counter this the government collects information about cars when they go through a safety check but this is not enough and customers can get cheated.
If the regular ODO meters in cars are changed and a new type of ODO meter that is based on a blockchain is implemented then ODO meter fraud will not happen as tampering with this new type of ODO meter is impossible.

2. Data In A Blockchain Can't Be Tampered

The data stored in blockchains are said to be immutable but it's really not. The data can actually be tampered if the attacker is able to get control of 51% of the network. This is called a 51% attack.

This attack has happened to many cryptocurrencies like XVG, BitcoinGold, Shift and Krypton

3. Cryptocurrency Transactions Are Untraceable.

Most people believe that crypto transactions are untraceable, but this is not true. The sender's and receiver's identity are hidden through their addresses but this does not make a crypto transactions untraceable.

Security agencies get everyones address details from exchanges and wallet providers and transactions are no longer private.

4. Only Criminals Use Cryptocurrencies.

This is partly true because bitcoins were the currency of the dark web and anyone could buy drugs and guns easily. It was like shopping on amazon and some stores also give free shipping.

Also the biggest criminals started using ripple to conduct cross-border transactions.

But Still there are a lot of clean people who use crypto like you and me.

5. Coins And Tokens Are The Same

This misconception stared because of increasing popularity of ERC20 tokens. When they first came out people thought that the tokens are just like regular cryptocurrencies with their own blockchain etc.

The truth is, Tokens are digital assets that are based on a blockchain. it can represent many different things like shares of a company(security token) or a method of payment in a Dapp's ecosystem(utility token).