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According to a Forrester report, blockchain technology is surrounded by incorrect interpretations, from immutability to smart contracts, which business managers must know.
Technology-based business applications are on the rise. In financial services, for example, Mastercard is launching its own blockchain network to enable partner banks and merchants to make cross-border payments more quickly and securely. GFT is supporting the creation in Europe of a blockchain-based cross-platform with applications ranging from reducing the risk of fraud in billing to certification of products for the pharmaceutical sector.

Maersk and IBM have developed a system that leverages technology to track global shipments, while Microsoft is designing a blockchain-based platform to protect digital identities.
And these are just a few examples.

The blockchain is ranked among the most important technological trends of 2018. And, precisely because it is an emerging technology, it is surrounded by myths and false beliefs. A team of Forrester analysts, led by Martha Bennett, identified six of them and described them in the Blockchain Technology report : A CIO's Guide To The Six Most Common Myths . Here are what they are.

1 The myth of immutability
In the language of the blockchain the term "immutable" means something that "can never be changed". But this is a technically impossible scenario, according to Forrester researchers.
There are at least two ways to make changes to a blockchain.

" One consists in re-elaborating the chain in its entirety or up to the point preceding the occurrence of an undesirable event; this operation cancels and recreates the chronology - at the dawn of the bitcoin something like this happened ", explain the analysts in the report. " The other is the 'fork', that is a 'bifurcation' of the chain: with this operation the code and transaction history is maintained, but the operation of the software is changed . The best known example is the fork of Ethereum , introduced to face a disastrous hacker attack in 2016 ".

From a technical point of view, blockchains with authorization are easier to modify and have far fewer nodes than public blockchains, especially in the early stages.

"This makes them technically more vulnerable to the subornation of criminals or scammers who have access credentials to the network. In practice, the security and governance mechanisms applicable to the network keep the risk under control, "reads the report.

" Participants in the ecosystem need to be aware that it's not the technology itself that protects the blockchain records from being edited, but the way the network is designed, implemented and executed. The reasoning applies to networks with consensus mechanisms that support greater scalability, but which alone can provide little or no protection against malicious attacks . "

2 The myth of disintermediation and decentralization
Cost reduction and increased efficiency are the main reasons why a company chooses to transfer a process over a blockchain-based network.

" In many cases, this involves the elimination of an existing intermediary. For example, why negotiate exchanges and transactions through third parties when it is possible to adjust them directly between commercial partners? ", The researchers explain. " There are scenarios where this can be translated into reality, but it is wrong to assume that there will be no trust intermediaries in the blockchain networks or that these networks are entirely decentralized ".

In practice, according to analysts, blockchain networks are not completely disintermediate, but they are distributed networks that maintain a certain degree of centralization and which always require the presence of intermediaries, possibly different from the previous ones.

3 The myth of "non-trust"
The two main blockchains - Bitcoin and Ethereum - have shown that it is possible to exchange "value" between people and entities that do not know each other or trust each other.

" But they also proved that this statement is a myth. No network is completely without trust. Participants must place their trust in the continued functioning of these networks and must do so on many levels, "explains the report. " For example, they have to trust math and cryptography, as well as the fact that the code will always work as expected ."

4 The myth of truth
In many applications blockchain-based networks promise to prevent fraud and ensure the origin of goods in the physical and digital world.

" To some extent this statement is correct, as blockchain-based transactions are extremely difficult to tamper with, and any attempted tampering is recognizable. But in some cases, no technology, not even blockchain, can act as a deterrent, "say Forrester analysts.

It is essential to keep in mind that something is not "true" just because it is on a blockchain. Blockchain alone can not guarantee the origin of physical goods, and cases of simple tracing must be separated from those requiring certificates of origin.

5 The myth of transparency
Making transactions more transparent is a key advantage of blockchain-based networks.

" But for most companies, transparency can be a disadvantage. In addition to solving scale problems, securing confidentiality is the biggest technical challenge that developers have to solve, "according to the researchers team.

CIOs should note that, in a typical stack block, all content on the chain is visible to all participants, and this can conflict with the need to maintain data and transaction privacy.

Transparency and traceability are not synonymous with proof of provenance or integrity; this is why company managers must agree on confidentiality requirements before choosing blockchain technology.

6 The myth of smart contracts
Smart contracts are among the main reasons why many companies choose blockchain technology. However, according to the researchers, it is necessary to be clear about what they are and the context in which they operate.

Smart contracts involve process automation and incorporate business rules into the code: they are triggered by certain events to perform functions that trigger other events.

" By definition, an intelligent contract is valid to the extent that it is the person or team that has defined the rules and programmers that have translated them into code, " says the report.

However, the intelligent contract requires a real contract that is legally enforceable and binding.

" Despite what many blockchain advocates proclaim, the code is not law. Even if the participants in a blockchain network accept the results of the application of an intelligent contract, they must however stipulate a separate legal contract that certifies what has been agreed and satisfies other standard contractual principles ".