Debunking common myths of developing blockchain applications

Many builders are on the fence about pursuing a profession in blockchain, which is unsurprising given the trade’s deeply ingrained misconceptions. Largely influenced by the media’s position in spotlighting scams that aren’t associated to the blockchain know-how itself however leverage frequent blockchain buzzwords – in addition to the circulation of misinformation inside blockchain communities in boards and on social media – these ‘myths’ have steered the blockchain dialog additional away from its true functionalities.

They’ve additionally generated antagonism within the developer world, inflicting battle between the avid gamers and people who need to mine blockchain and cryptocurrencies. Because the {hardware} utilized by blockchain is just like those that need to play video video games – notably, graphics playing cards – when demand is excessive, the {hardware} turns into more durable to pay money for. This has put the 2 teams on a path to query blockchain and the way it works.  

Within the broader enterprise sense, blockchain know-how is usually grouped into the class of ‘revolutionary know-how we’ll ultimately use’ – one thing that’s pushed by short-lived hype. Nonetheless, with use instances round blockchain’s real-world influence gaining traction and proving its performance, these misconceptions want difficult – not solely to offer better readability on what a profession in blockchain entails at present, but additionally to mirror the alternatives that at the moment are obtainable for builders within the blockchain house. Listed here are seven frequent myths demystified:

1. Blockchain know-how can’t be green-conscious  

Current conversations within the trade have pointed to the power consumption of blockchain and simply how sustainable it truly is. Many of those arguments are legitimate with Bitcoin per yr utilizing power that’s equal to sixty billion 600 and fifty million smartphones charging. Once we take into consideration the rising and extra thrilling use instances of blockchain know-how – from enhancing the effectivity of the non-public fairness market or enabling less complicated investments into inexperienced power bonds – Bitcoin merely doesn’t issue that in. 

However Bitcoin isn’t all of blockchain. Proof-of-stake blockchains safe the community whereas additionally eliminating the carbon emissions situation that’s inherent with proof-of-work blockchains like Bitcoin and Ethereum. They usually’re rising. 

Proof-of-work blockchains are what’s behind conventional blockchain ‘mining’, the place ‘miners’ are tasked with fixing a mathematical puzzle so as to add a brand new block (or packages of knowledge) to the blockchain. Not solely does this require an enormous quantity of computational energy as a result of they require the miners to all compete to resolve the identical very complicated equation, however it additionally drives power consumption for firms working these computer systems sky excessive. 

Then again, proof-of-stake blockchains merely require these engaged on the chain to have pores and skin within the sport – a stake – by placing financial worth in danger to attest they may act within the curiosity of the chain and its customers, slightly than tasking members with math equations. Additionally they use general-purpose computer systems and may be run from the cloud, requiring no graphics card to mine it. So, with extra firms shifting in direction of a proof-of-stake method, the trade’s greener future is trying much more promising – as is the divide between the avid gamers and miners within the developer neighborhood.

2. The blockchain trade is about on its ‘get-rich-quick’ mentality 

A standard criticism of crypto is that it’s a Ponzi scheme. For instance, when shopping for Bitcoin, many depend on there being somebody to purchase it off them at a better value. Whereas there could also be some validity to that, it’s essential to differentiate the mature firms who’re considering long-term and constructing real utility and performance from those who aren’t. 

It’s powerful to disclaim the dynamic development mentality amongst blockchain gamers. Though this will create a way of fluctuation throughout the trade – with some keen blockchain firms accelerating forward with an absence of course and data – it additionally creates visionaries that play an important position in driving blockchain’s improvement and adoption. This isn’t to say that somebody can’t ‘get-rich-quick’ in blockchain; it’s simply that it’s not the central driving pressure and that there’s extra to it than the short-term successes. By selecting to affix one of many blockchain gamers that has a transparent imaginative and prescient and long-term mission, you may safe a steady and viable profession path. 

3. Blockchain is just an try and make decentralized digital currencies 

Limiting blockchain’s perform to purely creating decentralized digital currencies is an injustice. Blockchain is greater than cryptocurrency. It’s about creating decentralized methods that remedy real-world issues. 

For instance, the unequal entry to financial development that exists in at present’s society may be solved by automating and simplifying regulated markets with blockchain. In finance and securities, blockchain opens up the choice for fractional asset possession, which will help belongings turn out to be extra liquid. It could possibly additionally create new belongings that merely weren’t attainable earlier than – both as a result of they got here at too excessive of a price to situation, service or handle, or as a result of they got here with too excessive a threat. It’s all about augmenting processes which might be certain to custom and subsequently – in some instances – hindering innovation.

4. You’re restricted to creating Bitcoin or Ethereum ecosystems 

Since blockchain has historically been constructed by builders and utilized by builders, these with much less of a know-how background might not even concentrate on the several types of chains obtainable. Bitcoin and Ethereum are definitely extra well-known chains, however there are others on the market which might be extra superior when it comes to combating the problems related to Bitcoin and Ethereum options – points like identification, governance, confidentiality and compliance. Wanting past the plain can uncover various alternatives inside the blockchain panorama to develop forward-thinking functions. 

5. Each blockchain is an island 

Interoperability is the top aim for future-gazing blockchain firms. As interoperability is feasible, many members at the moment are specializing in it and having conversations with institutional gamers and governments in making certain integration is as seamless as attainable, and that real-world utility and interoperability is introduced into the blockchain house. It’s a work-in-progress and a collaborative effort.  

Within the safety tokens house, that is extremely essential. Whereas securities legal guidelines differ throughout completely different asset courses and jurisdictions, a profitable open finance platform should be capable to accommodate and make sure the compliance of any sort of asset and jurisdiction. However because of good extensions utilizing a mix of Rust / WASM based mostly good contracts, monetary primitives comparable to compliance, capital distribution, settlement and company governance, may be prolonged. These be certain that asset issuers and traders should not restricted to utility offered on the base layer of the blockchain and may deliver their very own compliance guidelines and different performance to the blockchain.

6. Blockchain firms are run by nameless scammers 

Because the meme of the blockchain scammer turns into acquainted within the trade and past, some gamers within the blockchain world have opted to make their groups semi-anonymous. They cover within the shadows, away from public sight. For some blockchains, there’s a free and undefined assortment of members working the chain – a few of that are pseudonyms. This hasn’t labored in favor of constructing credibility and belief with blockchain customers and builders. There are nonetheless reputable blockchain firms which have employed gifted folks to develop blockchains in good apply. It’s a matter of differentiating the nice from the dangerous. 

7. Blockchain is only a database  

A hangover from the Bitcoin world, many view blockchain as a glorified database, slightly than the complicated methods they’re at present. Due to blockchain’s decentralized nature, there are many issues inside the blockchain world that builders want to resolve, largely round governance and managing upgrades. For instance, blockchains are prone to forks throughout upgrades, the place the chain splits into two separate chains, which may expose main authorized and tax challenges for tokens backed by actual belongings. However the blockchains that keep away from the dangers of onerous forks will naturally pull forward. 

There are a bunch of blockchains which might be finishing up the steps in mitigating these issues. These which might be constructed on Substrate Framework think about the chain over time and assume that the enterprise logic should adapt to unexpected challenges and bugs. With a runtime improve mechanism and a governance system sitting behind it that triggers whether or not the improve occurs, the chain may be iterated quite a bit quicker with out each replace being an enormous deal like in Ethereum. 

Finally, training round blockchain’s know-how, functionalities and influence is crucial in overcoming these myths. Being surrounded by gifted builders will help, transferring data inside a tradition that encourages improvement. However it’s additionally about steady training throughout a developer’s profession, each formal and casual. Selecting an organization that invests in studying and improvement is essential for conserving skillsets contemporary, related, and up to date – whether or not that’s studying a brand new coding language, new know-how or making an attempt out a completely new space. The blockchain world strikes at a outstanding tempo, which suggests builders should too.

Adam Dossa, CTO, Polymath