For years, there have been systemic attacks and misinformation against the blockchain industry. Despite pressure from mainstream institutions and attempts to thwart the crypto economy at all costs, the sector is booming with a huge rise in DLT adoption, awareness, and job openings, even in a bear market. All of the world’s biggest companies are leveraging DLT in some fashion. Despite the growth in the space, some myths persist, namely that DLT is just a sophisticated spreadsheet.
The first myth
The first criticism is that the only possible use of cryptocurrencies is for money laundering and that this is what criminals are currently using it for. This claim is easily debunkable. Studies have shown that criminals prefer cash and that bitcoin is quite easy to trace in comparison. Additionally, Danske Bank was recently found to have laundered USD 220 Billion in the biggest AML scandal in European banking history. In light of the fact that the entire crypto market stands at just over USD 200 Billion, the money laundered through financial institutions far exceeds anything that is happening in the world of cryptocurrency. Danske Bank is just one recent example. Last year, Common Wealth Bank of Australia was found guilty of violating AML procedures and was fined USD 530 Million, the largest fine in Australian corporate history. Millions are reported to have gone to the drug trade, and over 800,000 accounts were improperly monitored.
The second myth
The second most common myth is that blockchain is just a spreadsheet with no discernable advantages. Nouriel Roubini was the latest critic to use this line of attack, indicating that there was no real need for banks to share valuable and proprietary data with the world, further asserting that blockchain was a ‘glorified spreadsheet.’
Yet no other spreadsheet has the qualities of decentralization, immutability, and transparency. Decentralization means that the servers hosting the network are distributed worldwide, meaning they cannot be controlled by one party. Immutability means that the data cannot be changed, and transparency means that the transactions are publicly viewable by anybody. This is what takes place with distributed ledgers and not with any other kind of database or spreadsheet.
By contrast, the other ‘spreadsheets’ contain none of these qualities. Because the other spreadsheets are centralized, they are vulnerable to hacks. These hacks include the loss of private customer data such as the Yahoo and Equifax scandals. It is something of a double standard to indicate that there is no point keeping confidential data on the blockchain when the current industry has a history of compromising the very same data. The ‘spreadsheets’ kept in banks can be easily changed and manipulated, and the process of audits and regulatory checks has thus far been an obvious failure.
Blockchain is nothing like a spreadsheet, nor is it comparable to any kind of previous database. There has never been a database or spreadsheet that possesses the capabilities of immutability, transparency, and decentralization launched on a large scale and open to the public. In many ways, it removes the need for governments and corporations as they operate at present, which is why there has never been an incentive for such a ‘spreadsheet’ to be launched.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.