Is there no complete Decentralization at all? Experts reveal 11 blockchain misunderstandings: will hinder the promotion of technology

The global Block chain market has broad prospects, but misconceptions still exist

According to the latest data, the global Blockchain technology market reached 17.26 billion US dollars last year, and is expected to expand rapidly at a compound annual growth rate of 87.7% in the next six years. However, despite the enormous potential of Blockchain, there are still misconceptions about its understanding. These misconceptions may hinder the further promotion of the technology. Please provide text to be translated. Image source: APK Investment Management LLC

Forrester Research recently released a report summarizing 11 common misconceptions about Blockchain that have persisted over the past decade, and analyzed in depth why they continue to exist.

Mistake 1: The Block chain itself "exists"

Many people will say "solve this problem with Blockchain" or "put something on the Blockchain". In fact, this statement is problematic. Blockchain is not a single entity, but a conceptual architecture that can be implemented in different ways. For example, the architecture and functions of public blockchains (such as Bitcoin and Ethereum) and private blockchains (permissioned networks) are different. In addition, some hybrid networks combine the characteristics of public and private blockchains.

Mistake 2: Block chain can completely replace intermediaries

While Block Chain enables peer-to-peer value transfer, that doesn't mean intermediaries aren't needed at all. Third-party roles are still important in enterprise apps. For example, wallet providers, exchanges, and custodial services remain key players in the cryptocurrency industry.

Mistake three: The Block chain is completely decentralized

Decentralization is one of the core features of the Block chain, but it is not absolute. For example, Bitcoin and Ethereum, although they are public block chains, actually have a lot of control over their developers and miners, and these controllers are not accountable to anyone.

Image source: X

Misconception 4: Blockchains do not require trust

Many people think that Block Chain is a "trustless" technology, but in reality, users still need to trust the network's operating mechanisms, including cryptographic algorithms, code, and those who have the ability to modify network code or add blocks.

Misconception 5: The Block chain is completely immutable

Immutability is a major feature of the Blockchain, but in some cases, the Blockchain data can be changed. For example, it is possible to modify the historical records by recalculating the chain or creating a fork. Therefore, the immutability of the Blockchain is not absolute and may not always be the feature that enterprises need.

Misconception 6: Blockchains are more secure than other technologies

If not properly designed, the Block chain is not inherently safer. For example, user credentials may be compromised, or an attacker may exploit vulnerabilities in certain nodes to carry out an attack. Therefore, the security of the Block chain depends on its specific design and implementation.

Image Source: X

Myth 7: Block chain is a "truth machine"

Although the blockchain can ensure the integrity of data, it cannot guarantee the authenticity of the data. For example, the system cannot determine whether a property registration belongs to the true owner, nor can it verify the legality of data usage authorized by the user.

Misconception 8: Blockchains can automatically improve data quality

Block chains can protect data from tampering, but it cannot solve the quality problem of the data itself. If there are errors in the data originally entered, the Block chain will only make those errors "permanent". Therefore, data quality issues must be addressed before being written to the Block chain.

Misconception 9: Transparency is always beneficial to businesses

Block chain's transaction records are open and transparent, but for enterprises, excessive transparency may lead to problems such as the leakage of trade secrets. At present, technologies that solve data privacy problems, such as zero-knowledge proofs, are still complex and not yet universally applicable to enterprise applications.

Source: Blockchain

Misconception 10: Smart contracts will replace lawyers

Smart contracts can automate parts of the process, but the statement that 'code is law' is inaccurate. Parties still need legal agreements to ensure the execution of smart contracts and cover other standard contract terms.

Misconception 11: As long as the Block chain is built, users will naturally come.

Many enterprises believe that as long as they establish a Blockchain network, users will automatically join. However, the reality has proven otherwise. Reports indicate that many enterprise Blockchain projects will fail between 2022 and 2024. The reasons include imbalanced relationships within the ecosystem and imperfect business models.

This report reminds us that when companies adopt Blockchain technology, they must fully understand its potential and limitations, and combine practical needs to design reasonable application solutions.

This article is authorized to be reprinted from: 'Foresight News'

Original Author: Rachel Wolfson

The article 'There is no complete decentralization at all? Experts reveal 11 misunderstandings about blockchain: it will hinder the promotion of technology' was first published in 'Cryptocurrency City'.