6 misunderstandings about Bitcoin and blockchain

Foreword: Bitcoin and blockchain have strong community attributes, as well as a variety of understandings of bitcoin and blockchain. Different routes and ideas have the soil in which they exist. It is the different routes and ideas that stir up each other to create something new. This article favors the decentralized ecology of Ethereum, so its views have their own preferences. As investors and developers in the encryption world, they can be compatible, but they must gradually form their own industry judgments.

In the past few years, people have talked so much about Bitcoin, Ethereum, cryptocurrencies, and blockchains that they are almost indistinguishable from facts and opinions, or both. The blockchain industry is developing rapidly and has been changing, with so many risks, we are still trying to build a common understanding among the many global players involved.

In addition, in the field of digital media, especially cryptocurrency and blockchain media, there is a tendency to pursue a sensational effect, which makes it more difficult to understand the nuances of important issues.

As the team building the future of the blockchain moves toward the spring of cryptocurrency, and the next phase of blockchain development is clearly visible, some of the paradox left in the “chainy years” of the blockchain is worthy of our correction. . Some views are held by the public, while others are passed in the field of cryptocurrency. The following are the six biggest misconceptions about blockchain and cryptocurrency , and some things that are happening prove that they are wrong.

 

1. Encrypted currency mining is harmful to the environment

 

Now, you are already familiar with a popular saying that is often discussed when discussing blockchains or cryptocurrencies: mining bitcoins through workload proofing algorithms consumes more energy than emerging economies and is causing a deterioration in the Earth's environment.

There is only one question in these gloating comments: the data on which all these alarmist reports are based is cut by a morally suspicious lonely blogger who estimates his own number, distorts his approach, and completely ignores the problem. Basic aspects. Robert Sharratt pointed out in an in-depth article by Hackernoon that the source of your most trusted news is how to get the message in a good abridgement – "The report about the environmental damage of Bitcoin is pure rubbish." read.

A 2018 World Economic Forum report even identified the application of 65 blockchain technologies to help protect the planet and the environment. Projects like Bounty for Basura are using blockchains to create new models of sustainability. As the development of Ethereum continues to develop towards a more energy-efficient and environmentally-friendly Proof-of-Stake model than the current work of leading blockchain technology, we are moving towards a future of mitigation Step forward.

2. Bitcoin is a cryptocurrency blockchain

 

If you are reading this article, chances are that you have already explained to others your interest in blockchain technology, and the result is just a stunned look until you speak Bitcoin. Although the trend is rapidly moving in the right direction, many people still equate the blockchain with cryptocurrency, which is equivalent to bitcoin. However, compared to other tokens, Bitcoin's current market dominance is about 50%, which was close to 100% in most of the history, and fell from 85% in less than two years, but it is also high. At the lowest point of 33%. Although the cryptocurrency frenzy in 2017 has been significantly weakened, it has laid the foundation for the global token ecosystem, proving that cryptocurrency is more than just bitcoin.

Obviously, bitcoin and cryptocurrency are only the first stage in the long history of blockchain development. Programmable smart contracts and distributed applications like Ethereum are the future direction. Recent reports show that Ethereum's global developer base—the infrastructure, solutions, DApps, and network protocol building teams—is more than twice as much as Bitcoin (conservative estimates).

Take a look at the speeches of the greatest people in the tech world, and you'll see that their views are the same: projects and industries with the most developers get the best results. This is why decentralized finance, enterprise solutions, gaming and media industries that are integrating blockchain technology are booming.

Has the trend been discovered in the bitcoin market since 2013?

3. All cryptocurrencies are securities

 

Some of the tokens and cryptocurrencies issued through 1C0 are indeed unregistered securities. For example, tokens or cryptocurrencies that provide dividends, conform to the Howey Test, or have the same quality as typical stocks, will be classified as securities. However, the emerging reality is that not all cryptocurrencies are securities.

The US Securities and Exchange Commission (SEC) has previously stated that eth is not a security. Recently, senior SEC members, including SEC Chairman Jay Clayton and Treasurer Bill Hinman, have been using public statements to “play table tennis” in response to positive emotions. The most recent was in March, Clayton said: Digital assets may initially be offered and sold as securities because it meets the definition of an investment contract. But the definition may change over time, if the way digital assets are offered and sold later no longer conforms to this definition.

It is clear that changes in regulations are very slow, but this is necessary to protect individuals from fraud and malicious actors. It is worth noting that the regulations that have been in place since 1933 should be viewed from a modern perspective. The new rules will need to consider various types of token models.

4. Ethereum cannot expand

 

Extending the decentralized network's ability to handle transaction volumes is a challenge without sacrificing security and speed. However, some of the smartest minds in the world are working to address scalability through the first layer (such as fragmentation technology) and the second layer (such as the state channel, plasma) solution. At the SXSW Interactive Conference keynote, ConsenSys founder Joe Lubin said that in the next two years, once a tiered solution is available, the Ethereum network will be able to handle millions of transactions per second.

The maturity and development of all new technologies takes time. Ethereum has made significant progress in becoming the underlying protocol for Web 3.0. Ethereum's overall ecosystem continues to show significant signs of growth, and it is now clear that the roadmap for scalability has been clearly laid out and just around the corner.

5. The cryptocurrency is only used for evil purposes.

 

As a private, secure and global trading network, cryptocurrencies provide value transfer, remittance and retail payments to conflict zones, and of course, incredible convenience for crypto-network transactions.

The Global Drug Survey (GDS) also found that when it comes to buying drugs or exchanging value for illegal services, cash is still the most important – you may find that those who condemn cryptocurrencies rarely point to cash. The dark technical features of crypto transactions and the use of cryptocurrencies for illegal purposes can certainly be great news stories.

But so far, with many of the world's leading institutions like Facebook and JPMorgan Chase are about to launch their own digital currency – it's clear that Bitcoin's early bad reputation is a factor in the marginality of the technology – now we have entered A more mainstream era.

6. Token is worthless

 

The 1C0 enthusiasm has led to thousands of cryptocurrency and blockchain projects dedicated to tokenizing the world. Although many fundamentally less robust projects have been left behind in this wave, we have acquired a growing ecosystem of originality, functionality and adaptability that is truly remarkable. Based on token-based projects, they will make the potential of the blockchain a reality.

Unique token applications are gaining attention. MakerDAO uses a novel model to create DAI, a price-linked stable currency. The second token Maker (MKR) in the MakerDAO system acts as a collateral to maintain the stability of the DAI and allows token holders to vote on offers in the MakerDAO community.

Brave's BAT tokens make incredible steps in reconnecting our way of interacting with the Internet, while other tokens (such as Augur's REP) work by acting as a validator for predicting events. Civil's CVL tokens are used to verify the accuracy of their online news. The application case is developing from theory to execution, and the iteration continues. This is a wonderful thing…

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Risk Warning: All articles in Blue Fox Notes do not constitute investment recommendations . Investment is risky . Investment should consider individual risk tolerance . It is recommended to conduct in-depth inspections of the project and carefully make your own investment decisions.

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This article is from ConsenSys, translated by the "Blue Fox Notes" community "Dyna".