Blockchain Made Easy – Part 6

Myths about Blockchain

 

Myth

Reality

It solves every problem

No, it is just a database

Trustless Technology

It can shift trust and also spread trust

Secure

It focuses integrity and not confidentiality

Smart contracts are always legal

It only executes parts of some legal contracts

Immutable

It only offers probabilistic immutability

Need to waste electricity

Emerging blockchains are efficient

It is inherently unsalable

Emerging blockchains are scalable

Limitations of Blockchain technology

Higher costs: Nodes seek higher rewards for completing transactions in a business which work on the principle of Supply and Demand

Slower transactions: Nodes prioritize transactions with higher rewards, backlogs of transactions build up

Smaller ledger: It is not possible to a full copy of the Blockchain, potentially which can affect immutability, consensus, etc.

Transaction costs, network speed: The transactions cost of Bitcoin is quite high after being advertised as ‘nearly free’ for the first few years.

Risk of error: There is always a risk of error, as long as the human factor is involved. In case a blockchain serves as a database, all the incoming data has to be of high quality. However, human involvement can quickly resolve the error.

Wasteful: Every node that runs the blockchain has to maintain consensus across the blockchain. This offers very low downtime and makes data stored on the blockchain forever unchangeable. However, all this is wasteful, because each node repeats a task to reach consensus.

With this, we have come to the conclusion of the “Blockchain made easy” series. We hope you have learned something fresh, new and different in the past few weeks. Please stay expectant as we’ll be dishing out new information next week.

 

Written By: Ben 

Edited By: Mosun

 Graphics By: Jacobite 

 

About the author

A community building project to educate African youths about the possibilities of blockchain technology powered by the Telos network.

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