5

Distinguishing Facts from Myths

1.3.5  Smart Contracts Have the Same Legal Value as Regular Contracts

A smart contract is a set of code or some functions which will be triggered when specific

conditions are met [6]. Today, smart contracts are prevalent and useful in every domain

where the Internet of Things and artificial intelligence are utilized. When we consider

an application to order online groceries when the stock is low in our refrigerator, some

automated smart contracts will be triggered when the stock goes below the set level in

this scenario. These may even involve financial transactions. There may be chances of

reversals, too. If a customer files a case for the reversal of payment and takes this to

court level, they may have an advantage in the eyes of the law, as smart contracts are not

valid legal contracts. We can only present smart contracts as proof of transactions and

say that they were executed because some conditions were met in the system. But, the

customer may benefit from the bliss of ignorance due to the complexity of the system.

1.3.6  Blockchain Is Going to Change the World

Blockchain technology promises many innovative notions and advantages over tra-

ditional methods, resulting in people relying on this myth. The Bank of England’s

mounting interest in cryptocurrencies and other news on bitcoin acceptances adds

fuel to this myth. A closer look at these shows that most exaggerated ideas are

impractical and may turn out to be a bungling digital makeover of the conventional

ledger system. Blockchain may have the potential to conquer the technological path-

ways, but the world has to wait for a flawless implementation to achieve this goal [7].

1.3.7  There Is Only One Blockchain

It is a common misunderstanding that blockchain is only one technology in distrib-

uted ledger architecture. But, there are other technologies, like Tangle, Hashgraph,

etc., with the name of blockchain, which have a different type of implementation for

the peer-to-peer distributed methods. When we consider the bitcoin blockchain net-

work, the question has relevance, and there is only one bitcoin blockchain network.

Studies are ongoing to scale up the blockchain network by including only financial-

related or similar networks and making a more sustainable market [8].

1.3.8  Blockchain Is a Cloud-based Database

The most common blockchain myth is that everyone considers blockchain as a cloud-

based database. But in reality, it is not a cloud-based application. Blockchain-based

applications have to be installed on the client computer, and this should be connected

to the internet. This computer must have a high speed and robust internet connectiv-

ity to ensure better chain strength. Any computer running this application is one of

the nodes in blockchain and can store ledgers.

There may be physical files stored in the server in cloud-based applications, such

as spreadsheets or documents. But, blockchain stores keep the records as proof of

existence. This means that proof of existence clearly names a file or document, but it

will not showcase the actual document [9].