We are going to come right out and say it: we are ticked off. Why? Because every day there are articles shared on CoinTelegraph, CoinDesk, and many other cryptocurrency news publications applauding the use of “blockchain”. We are here to set the record straight and tell you why the use of “blockchain” technologies by companies like China and Russia or companies like Microsoft and IBM are not only completely unrelated to cryptocurrency, but legitimately terrifying prospects.
First, let us go through a few key terms so you understand the difference between the technologies being used, and will not longer be swindled into the illusion that any of these tech giants or governments are actually building something which is positive for the cryptocurrency space.
What is a distributed ledger?
A distributed ledger is a record of data (e.g. transactions) which is shared between various computers. This sharing can be spread across multiple institutions and countries. However, distributed ledgers are not public like cryptocurrency blockchains, nor are they decentralized in the way cryptocurrency blockchains are, and they are certainly do not protect your privacy.
For example, imagine you are looking at one of China’s “blockchains”. What you would probably see is a series of computers in different rooms spread across different buildings in different countries. Each computer has the record of the data, so it is not kept in a centralized location per se (like an individual computer). However, every single computer in the network is owned and operated by China, which as we know, sees everything.
Therefore, many of the “blockchains” being developed by institutions and governments are just distributed ledgers, because they are not public, they are not actually decentralized, and they are not private. Their use of these technologies means next to nothing for cryptocurrency adoption.
What is a blockchain?
A blockchain is also a record of data (e.g. transactions) which is shared between various computers. This sharing can also spread across multiple institutions and countries. The difference between blockchains and distributed ledgers is that distributed ledgers do not use the same structure. Blockchains are literally a chain of digital blocks containing a record of data and how it has changed from block to block.
Again, when these are used by tech giants like Microsoft or IBM, they are not publicly viewable, they are not decentralized in the way cryptocurrency blockchains are, and they do not protect your privacy. If anything, they are used to more efficiently track the data you are unknowingly giving to these entities when you use their products.
Therefore, many of the actualy blockchains being developed by institutions are not even close to cryptocurrency blockchains, and although this might make them more keen to take cryptocurrencies more seriously, they are more likely to copy existing cryptocurrency technologies and use them in a centralized manner to their benefit. A great example of this is Central Bank Digital currencies, which will be 100% traceable and out of your control at the end of the day even if they are built on blockchains.
What is a cryptocurrency blockchain?
A cryptocurrency blockchain is again a record of data (e.g. transactions) which is shared between various computers. This sharing is often spread across multiple institutions and countries. The difference between cryptocurrency blockchains and the two former imposters is that transactions on cryptocurrency blockchains are (often) publicly viewable, they are (often) truly decentralized, they (often) preserve the privacy of network participants, and transactions are actually stored in blocks.
You can go on a website like blockchain.com to see the public record of Bitcoin transactions or use Etherscan.io to see a public record of Ethereum transactions. Both are truly decentralized, because there are multiple individuals and entities participating on the network that do not all belong to the same company or political affiliation. Finally, they uphold the privacy of network participants because all you see on the public record are wallet addresses and balances.
Unless the “blockchain” in question meets these three criteria, then it means absolutely nothing to the cryptocurrency space. We are quick to forget that blockchains have both the power to free us and enslave us. In the cryptocurrency space, we believe in freedom and privacy. Legacy institutions on the other hand, are at all times trying to maximize their control of the population for political and economic gain.
So, next time you see an article from CoinTelegraph or CoinDesk applauding Russia’s use of blockchain voting for upcoming elections, ask yourself this: is it a good thing that the Russian government now has an even more accurate record of people voting against the ruling party? And is it a good thing that they have total control over the blockchain network which will be used to count votes? You will find that the answer in every single one of these cases is no.
Do your research, and do not led on by news publications (more specifically, their writers) which cannot find any quality cryptocurrency news so instead defer to hyping up the use of powerful technologies by extremely totalitarian and inhumane entities which want nothing more than to see cryptocurrency gone forever.