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There is a lot of misconceptions around in what a blockchain is – especially in the government sectors. A lot of the discussions with various government stakeholders gave me the impression that the following misconceptions are most prevailing and must be addressed by blockchain technologists:
Blockchain is like the Internet – you need to build a network infrastructure around the country or in a state – so that everyone can use that infrastructure to do their e-governance and other applications. Case in point is a publication by the Tamil Nadu E-Governance organization – they have claimed that they are building a state-wide blockchain which will enable all stake holders to build applications on – this is a very misleading concept. Blockchain protocols sit on top of the Internet (be in private or public blockchain) – what you need is the software that runs on various nodes (the nodes could be heavy duty – like servers or light weight – like mobile phones, depending on what the role of the node is in the blockchain)
Blockchain is secure – this is another dangerous misconception. Blockchain – if the mining, ordering, or consensus nodes are programmed correctly, and has the requisite redundancy – can guarantee information integrity – i.e. the information on which consensus has been reached cannot be changed without getting caught. However, blockchain nodes run programs, and for second and third generation blockchains they also get transactions done on behalf of people – through smart contracts. There have been numerous cases where smart contracts have been found to have security vulnerabilities – which led to huge monetary losses, exfiltration of information etc. So Blockchain does not guarantee security – it is the designers of the blockchain and programmers of smart contracts who must do either secure systems or do post facto remediation when security bugs are discovered – and provision for remediation must be in the design itself.