9

Distinguishing Facts from Myths

1.3.20  Transactions on a Blockchain Are Automatically Immutable

It depends on the nature of the implementation of the blockchain. Blockchain enact-

ment in bitcoin is immutable, but this involves a cost in computational capabilities. It

involves untrusted third-party involvement in all parts of transactions, and hashing

techniques should be sturdy enough to keep the data untampered with. It requires

high-powered computational systems, and the implementation cost is high. Here,

the auditors will notice any data change immediately, which may be cost-effective

in implementation. As with any other system, blockchain is exposed to tampering.

1.3.21  Distributed Ledger Technology and Blockchain Are Synonymous

The term DLT also enters the discussion whenever we discuss blockchain. We con-

sider blockchain also as a peer-to-peer distributed architecture. DLT is old technol-

ogy, and blockchain uses its concepts in implementation. Blockchain is not DLT

alone but has many more features [12].

DLTs and cryptocurrency were first suggested for the financial sector, including

banks. Conversely, it was quickly discovered that DLTs are not restricted to trading

in virtual currencies or goods but could be used to swap digital assets. The idea is

that DLT encourages network users to pass and update information or documents,

and that this is done in a trusted environment [13] (Figure 1.3).

1.3.22  Blockchain Is a Database

When a new technology arises, there is a common tendency to compare it with exist-

ing technologies. As blockchain is used to store data, we compare it with a database.

A database is absolutely not a blockchain. Both are techniques used to store data. A

database stores the data in a centralized server; the data will be shared with access

FIGURE 1.3  Blockchain is a subcategory of distributed ledger technology.