3 blockchain misconceptions and why they hold the tech back

Sept. 30, 2019 | by 

Photo via iStock.com.

Everyone from news anchors to CEOs are talking about blockchain regularly, but many still hold problematic misconceptions about the technology. These misconceptions are in many ways holding the technology back and preventing smaller parties from jumping in.

Some of these include:

It's all about Bitcoin

While not a lot of people know about blockchain, Bitcoin has become a household name. I've heard people from age 18 to 80 talking about wishing they had invested in the virtual currency during its huge value spike in late 2017.

However, by making it all about Bitcoin, we can really miss the power that blockchain has to offer. Also, due to Bitcoin's seedier past, many are turned off by crypto technology completely, because they think it's that "weird, techy thing that criminals use."

It's all about banking

Many of the top banks and financial institutions ranging from Wells Fargo to JPMorgan have begun investing in blockchain technology in one way or another, whether to create faster cross-border payments or to improve security of key functions.

The problem with making it all about banking is that it undermines blockchain's many other potential use-cases outside of the banking world such as:

• Supply chain management.
• Identity management.
• Confirming impressions for advertising campaigns.
• Giving immutable proof-of-ownership to content creators.
• Providing documentation for the underprivileged and underbanked.

In truth, we don't even know just how many areas blockchain will truly impact, because we are still in its infancy, much like the Internet in its early days. However, this is one more misconception that goes to the other extreme.

It's all about blockchain

If you go to enough conferences about blockchain or listen to enough blockchain evangelists, you will start to hear some pretty utopian opinions such as:

• The blockchain will eliminate poverty.
• The blockchain will transform our society into a decentralized paradise.
• The blockchain will completely change the way everyone does business for the better.

While it's true that blockchain, when used properly, can revolutionize the way we do business and other tasks, it is not a miracle drug. Blockchain at the end of the day is just a complex ledger technology that is very flexible.

Also, this sort of mindset really takes the responsibility away from the people who create the solutions and the people who use them. For example, the Internet is a wonderful tool that allows people to connect and collaborate worldwide. However, people can also use it to harass and abuse each other worldwide.

It all comes down to how we use a technology. We could use blockchain to create more efficient, fair systems or more unfair systems that are incredibly cluttered and complicated. At the end of the day, we have to decide how we are going to use blockchain, for good or for ill.