10.2 Top 5 Common Misconceptions - Video Tutorials & Practice Problems

In this video I'm gonna be talking to you about some common misconceptions when it comes to blockchain and bitcoin. The reason I'm sharing this with you is because as you engage in professional conversations with others, you will come a cross a few of these. So it's very good the you know these so you are aware what you're running into when you're talking about these. The first one I wanna focus on is many people equate blockchain as bitcoin. Many people think that blockchain and bitcoin are the same thing. As you have seen in this course, blockchain is the underlying technology underneath bitcoin, but bitcoin is only one application of blockchain. So blockchain is not bitcoin. Blockchain is used in bitcoin. But blockchain is not the same thing as bitcoin. So definitely this is a misconception. The next one I wanna talk to you about which you'll hear often is blockchain is a better database. And I wanna specify that blockchain is not a better database. The reason I wanna say that is because a blockchain is a very defined data structure. A blockchain is a ledger that keeps transactions and blocks which are linked chronologically and all of them are linked together using hash cryptography. Now that is what a blockchain is. But a database can do many more things. So you don't wanna just limit yourself into a blockchain. In some situations, you may be better off using a different type of database. As a result, you cannot state that blockchain is a better database. The next misconception I wanna tell you is that some people will state that blockchain and distributor ledger technology are the same thing. And that's incorrect. Le me give you exactly how it plays out. A blockchain is a ledger. And actually a blockchain is a distributed ledger. But not all distributed ledges are blockchains. So as a result, while a blockchain is a type of a distributed ledger, you cannot say that all distributed ledger technology is blockchain because many distributed ledgers are not blockchain. So you cannot say that blockchain and distributed ledger technology are the same. That's definitely a misconception. Another misconception you will often come a cross is that many people say that all blockchain are public. And you're gonna get that quite often. Now what I wanna point out is that not all blockchains are public. As a matter of fact there are private blockchains and there are also consortium blockchains. So when you think about public blockchains, that is only a certain type of blockchain. We mentioned bitcoin, we mentioned Ethereum, these are public blockchains. But there are other blockchains that are not public and rather they're private or consortium blockchains. So that is a misconception as well. The following misconception you will hear very often, which is that blockchain can make any business better. As you will learn in this course and we proceed in future lessons, you'll see that blockchain is not a good fit for many businesses. For a while there in 2017, there were many businesses that were trying to just add blockchain to the business. This is because there was a lot of hype around blockchain and many were trying to raise capital. So they were saying, "Well now will use blockchain." But the truth is, blockchain is not a good fit in many situations. And as a matter of fact, using blockchain absolutely makes no sense in many different businesses. So as a result if someone says that blockchain can make any business better, they are completely incorrect. That is a misconception. And finally, the one that I often come across, is that many people think that there is such a thing as physical bitcoin. Now the key thing I wanna point out to you is that there are some physical bitcoins, a very small amount, which were created and these were very unique, very random, which you actually have a bitcoin and you can actually add a private key with some bitcoin value to the back. Now mind you this a novel it has a very unique custom made type of item. But in common every day practice, there are no physical bitcoins. Bitcoins are actually digital currency and there are no physical bitcoins to it. The reason why I wanna primarily share this with you is that for a while there many people have actually gotten scammed and being sold physical bitcoins for thousands of dollars because they think that these are real bitcoins. But the truth is, there are no physical bitcoins.