(ThyBlackMan.com) Blockchain technology, also known as blockchain, gained popularity when more and more people started taking interest in Bitcoin and other crypto currencies. If you don’t know what Blockchain is, think of it as a ledger where you keep records of things. So if you think about the relation of blockchain and Bitcoin, the technology is used to track transactions. The most interesting thing about blockchain is that it is not controlled or owned. These records are kept on many distributed computers. Here are 7 interesting facts about blockchain technology you probably never heard about.
Blockchain can never replace the conventional money
You may have heard cryptocurrency advocates saying that blockchain will replace conventional money. It’s true that blockchain technology can help banks in many ways but it cannot and it will never replace the conventional money. Bitcoin-blockchain can only perform 7 transactions per second at the global level, which is very less and the process is too slow.
That being said, the transactions can only be recorded once in 10 seconds. Since conventional methods of processing transactions are scalable, regulators can increase bandwidth to increase the number of transactions per second but it’s not easy with the blockchain technology. So, something else can decrease our reliance on conventional money, but blockchain won’t be able to do it.
Its openness is actually bad
The idea of anonymity and openness with blockchain technology has led many people to believe that it is good for their personal finance as nobody controls the blockchain network. The truth is blockchain is not completely anonymous, it offers pseudonymity. In simple words, everything on blockchain is open which is actually bad. All the transactions records are open, and on the blockchain, if you’re transferring some money, let’s say bitcoin to someone, the receiver can see your holdings and the person can also see the transactions you made in the past and can also check your transactions in the future. Even if individuals wouldn’t mind disclosing such things to some extent, it is highly unacceptable in the corporate world.
Governments hate Bitcoin but love blockchain
Governments across the world have dismissed cryptocurrencies. China, India and many other countries have openly refused to accept cryptocurrencies. China has the largest Bitcoin mining community also began the crackdown on cryptocurrency but they love the core of Bitcoin – blockchain technology.
For various sectors, governments across the world are appreciating the use of blockchain technology under control. Governments hate the Bitcoin-blockchain connection but the benefits of blockchain technology have convinced world leaders to explore the potential solutions the technology can offer with efficiency, security, and speed.
It can cut banks’ 30% infrastructure cost
A new report by Accenture and McLagan says blockchain technology can reduce 30% costs banks spend on infrastructure. If we go by numbers and calculate the amount of money the world’s 10 largest banks can save using blockchain, it would be somewhere around $8-10 billion per year. The study is based on the data collected from 8 largest banks in the world. It’s no surprise why many banks around the world are working on permissioned blockchain technology.
The theoretical risk of 51% attack
Blockchain technology is not immune to the risk of 51% attack. If a person or a group of people controls more than half of the dispersed computing power which is used in mining, erasing the financial history or writing a new one will be possible for them. It means that for anyone who is not a part of that majority, the modified or new financial records will become a reality. For such purposes, the user will need to have control over a huge computing power but it’s not impossible because they will be able to reuse the same money as many times as they want.
There’s a solution for electricity issues
If you are familiar with the term “mining,” you probably know that it needs a lot of resources including electricity to keep the process running. According to many studies, blockchain burns a lot of electricity which is dangerous for the world. Proof-of-stake can be a revolutionary step to reduce the amount of energy used in mining. With the right to create blocks, participants will be awarded not on the basis of burning energy through computation, but on how much currency they have.
Lightning Network can solve efficiency and speed issues
The blockchain is slow and its inefficiency in general, but the solution is now available in form of lightning network. If everything goes well, it is possible to achieve the speed of millions of transactions per second which is faster than the speed of Visa which is capable of handling thousands of transactions per second. The lightning network performs transactions in individual channels which are separate from the main network. As a result, the main network remains more stable and functional.
Staff Writer; Corey Shaw
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