Market

The Biggest Misconception Businesses Have About Public Blockchains

Individuals, organizations, governments and businesses worldwide are beginning to recognize the real benefits of blockchain. When developed and utilized correctly, this emerging technology can significantly enhance the performance of digital systems and streamline processes, significantly reducing costs and maximizing profit. 

Tech giant IBM’s study shows that blockchain can save the global supply industry up to $1.8 trillion by 2025. Likewise, the World Economic Forum found that blockchain can save the healthcare industry up to $100 billion annually.

With these statistics, businesses can be motivated to adopt blockchain as a solution to the digitization of records and digitalization of systems. In fact, according to Blockdata, 81 of the 100 public firms in the world are already actively using and building solutions on blockchain technology.

Despite the undisputed real-world benefits of blockchain, further education and clarification are still needed because of the widespread misleading news and information about blockchain. This scenario is dangerous because it can greatly hinder blockchain adoption, which is still building its momentum worldwide. 

In data security, for instance, 67% of businesses experienced a data breach in the past year. One scenario that increases the likelihood of data breaches is when companies believe that their data is secure only when it is not visible to everybody and can only be accessed by certain people. This is why they decided to develop solutions on private or permissioned blockchains.

However ironic it may sound, the best way to secure data and safeguard privacy is to make it publicly available, a feature of a public blockchain—also known as a permissionless or public blockchain. Herein lies the biggest misconceptions about blockchains—that businesses have to keep their data to themselves in order to protect their privacy and increase security.

This misconception did not happen overnight. After the dot-com bubble, a rapid period of growth in investment-related companies in the late 1990s, the Internet fundamentally changed. According to blockchain research and development firm nChain’s Solutions Architect Kapil Jain, companies used to make services and utilities online that were unsuited to one another. 

Investors poured enormous amounts of money into Internet startups, many of which made little to no revenue. A speculative bubble was born, with many companies ultimately failing. The aftermath had survivors adapt to a new business environment, each developing their own online systems and services, which were incompatible. 

This situation led to an intricate web of isolated online services and utilities that could not work well with each other. Every entity has a different structure for handling its services and users. A ripple caused by a more “insular” Internet made companies believe that closing themselves off from other services is the best way to protect data. 

Decades after and cryptocurrencies and blockchains are still affected by this trend. 

In fact, the use of cryptocurrencies started out with users being lured in by the supposed anonymity of its transactions. This gave digital currencies a bad reputation as a haven for criminal activity. And while many cryptocurrencies really did choose to go down this route, digital currencies are in no way supposed to be anonymous. 

While many equate blockchain with cryptocurrencies, the former is actually the latter’s base technology. Blockchain is a decentralized and distributed ledger that records information in a way that makes it nearly impossible to manipulate or hack. 

And this immutability of transactions is supposed to lead to better transparency and traceability of records, while protecting data privacy through pseudonymity instead of anonymity and greatly increasing security through the number of nodes on the network. 

There are two main types of blockchain: permissioned and permissionless. A permissioned blockchain only allows access to authorized participants, and a central authority such as a company validates transactions. Permissionless blockchains, on the other hand, are decentralized and open access—anyone can validate data and participate in the network. 

Many companies mistakenly made permissioned blockchains due to their apprehension of native tokens. This unease was due to an upsurge of blockchain projects that added to the public confusion about blockchain’s utility. Risk-opposing enterprises wanted to avoid venturing into high-risk cryptocurrency tokens partly due to their lack of familiarity.

One disadvantage that permissioned blockchains have is their limited access by the public. The complexity of these systems to maintain additional access control, governance and security measures is much higher than public blockchains. 

Because public blockchains are open to anyone, they do not require such high-level measures. Instead, what augments its security that actually makes it better than permissioned blockchains is the fact that the sheer number of nodes makes it impossible for a cyber attacker to take control of the network.

Thus, BSV Blockchain is a viable option for companies to build their solutions. It provides an additional layer of transparency and security because the ledger immutability stores records. Most importantly, the stored data are open to everyone due to BSV being a public blockchain.

Indeed, the biggest misconception many businesses have about blockchain stems from a hasty generalization that private blockchains are more secure and private than public blockchains. Because it is termed “permissionless” and “public,” people automatically think that their personal information will be disclosed to the public. 

This is definitely not the case. Transactions may be public, but any kind of personal information that would lead to the identity of users are closely protected. And because public blockchains are usually comprised of thousands of nodes, they are virtually invulnerable to hacking and manipulation because it would take an enormous amount of hash power in order to take control of a majority of the nodes.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button