It’s certainly been an exhilarating time to be a part of the blockchain community. Now in the second half of 2018, the industry’s humble beginnings seem almost unrecognizable to us thanks to formalizing regulatory structures, burgeoning mainstream appeal, and tangible examples of use cases. It seems almost alien to think of a time when much of the world hadn’t even heard of cryptocurrencies like bitcoin or Ethereum, let alone the underlying mechanism that fuels them — blockchain.
In a few short years, these terms have all become household names. However, while seemingly ubiquitous, notable misconceptions still exist within the space that have clouded the perceptions of the general public. A great many people understand the buzzwords but few actually comprehend their meaning. Below, we delve into four points that many people still misunderstand about blockchain.
Myth: Cryptocurrencies are volatile, so blockchain is volatile
Any skeptic of cryptocurrency is likely to rest their perspective on one key fact about the industry: Volatility. And their assessment isn’t completely unfounded. The value of some cryptocurrencies can vary wildly based on legislative updates, investment trends, and global sentiments. The speculative nature of certain coins makes it difficult for users to view them — at least in their current iteration — as an adequate store of value. While these are all valid points, many are quick to extend the same criticisms to blockchain technology, and this is a shortsighted assumption.
Blockchain is far from volatile. Unlike centralized alternatives, blockchain is largely immune to fluctuations in the market. Because blockchain records aren’t stored in one singular location, but rather across an entire network, they’re far more protected against large-scale hacking events than traditional processes. It’s for this reason that major Fortune 500 companies have openly supported blockchain-based integrations as a way to fortify their existing cybersecurity protocols. Companies need an infrastructure they can depend on.
Myth: Blockchain is for business interactions only
When people think of blockchain, they think business. They envision scrappy startups and blue chip investment bankers using blockchain-integrations to fundamentally alter our commercial ecosystem. While a large portion of blockchain’s inherent value does, in fact, lie within the consumer tech world, the reality is that its applications are seemingly limitless. Data security, and moreover operational efficiency, are sought-after attributes in any industry.
Fashion companies can use blockchain to input transparency into their supply chain, ensuring that only the highest-quality and ethically-produced materials are used in the creation of a given garment. Museums can use blockchain to trace the origins of a fossil back to its source, providing each item with verifiable provenance and authenticity. Even philanthropic organizations can use blockchain to provide an estimated one billion people with a government-issued forms of identification — a hurdle that has, for far too long, prevented unbanked individuals from applying for a loan, receiving federal aid, and/or participating in global commerce.
Myth: Smart contracts are developer focused
While an integral part of a blockchain’s overall function, many users still believe that smart contracts are too developer-focused for the average person to understand. Yes, it’s correct to assume that smart contract developers are currently in high demand within the community. However, users shouldn’t interpret this to mean that one has to be a developer to find smart contracts useful. As blockchain becomes more streamlined and less technical, the process of making, distributing, and utilizing smart contracts will become more comprehensible to the general public, and smart contracts will become more streamlined as a result. We may one day see a world where users can create a smart contract with the same ease as searching the web or sending an email.
Myth: Blockchain will replace all traditional data systems
Blockchain is universally-referred to as a disruptive technology — and it is. However, just because it’s disruptive doesn’t mean that it needs to be all-encompassing. Once blockchain reaches its full potential, it’s likely to permeate all walks of life. Over time, it will lead to the dissolution of centralized processes that have long existed within our society. Still, many believe that the technology will eliminate centralization as we know it, leading to a world where banks, credit cards, and the internet cease to exist. This is a misconception.
Instead, blockchain will serve as a bridge between the centralized and decentralized world, giving users the tools to break free of dated processes that have long thwarted change within our society. Global adoption will not happen overnight; it will be an incremental process that will impact every industry differently based on the current regulatory landscape. As we enter an increasingly uncertain territory, one thing’s for certain: From humble beginnings in 2009, to the crypto boom in 2017, to industry maturation in 2018, we’re headed for a future with blockchain in its grasp. By quashing misconceptions within the space, we at Wachsman hope to help the world step into this new reality with confidence.