The obscure nature of Bitcoin, which made it quite difficult to understand at its early ages back in 2009 -10 brought many cryptocurrency myths that time has proven wrong and just results of lack of understanding.
After surviving these cryptocurrency myths, bitcoin has seen significant growth and acceptance by many. Even the USA government.
We present you with 10 of these myths and prove that those were only rooted in misconception.
Top 7 Cryptocurrency Myths.
1. Cryptocurrency Is A Scam
Most digital currencies don’t run on malicious programs that can dupe you of your money.
However, people have planned ways to trick others out of their cryptocurrencies or digital money.
In many cases, dubious developers run fraudulent ICOs ( Initial Coin Offerings ) for coins or tokens that are not in existence, raising huge funds and then they abscond. Leaving the victimized investors with a loss.
Fraudsters can also pretend to be agencies where you work asking you to pay your debts or charges with cryptocurrency.
With this, only knowledge and awareness can save you. Check out crypto scams on Federal Trade Commission’s Consumer Information website.
Now, the fact is crypto has grown into a strong accepted medium of exchange at supermarkets, online businesses, pal-to-pal transactions due to its safety, and as the US government has approved it, countries all over the world will follow suit in regulating it.
2. Cryptocurrency Is Not Real Money.
Money is a store of value, unit of account, and medium of exchange that can be translated into prices – IMF ( International Monetary Fund ) definition of money.
And cryptocurrency is a digital representation of stored value managed through cryptography – definition by FINRA ( Financial Industry Regulatory Authority ).
Cryptocurrency has the same value as real money and minds you and it is also taxed.
Meanwhile, many traders and businessmen accept bitcoin, Ethereum, and many other cryptocurrencies and you can also exchange your cryptocurrency for legal tender.
Note, whether an asset is a legal tender doesn’t influence it to be considered as money by financial authorities and regulators.
3. Cryptocurrencies Are A ‘For A Day’ ( Fad )
Cryptocurrencies are still perceived as a fad by few though it has survived a decade with a huge improvement and acceptance.
But don’t forget that at one time, the emails and the internet made sense to only the techies but now, part of daily activities, making life more easier and productive.
Cryptocurrency has already inspired a lot of technologies and products after just 10 years of being in existence.
We may not able to predict whether crypto will survive and evolve more into society but if its technologies and products exist forever, then we are bound to witness the sure-successful infusion of the digital currency with real currency and even have it as a legal tender when sellers start writing prices in crypto numbers they understand.
So far so good, governments are exploring ways to enact legal cryptocurrencies tied to an asset that is more fixed in price.
4. Cryptocurrencies Are Not Secured.
The only loose end in cryptocurrencies is how it is stored and accessed, such as your crypto wallet.
You can send a cryptocurrency from one person to another without any problem however the software and the platforms used to store and access these cryptocurrencies can be hijacked.
The security house behind cryptocurrency is the blockchain. This blockchain can be defined as a digital log of transactions recorded, duplicated, and distributed in a way that makes it difficult to break
In simpler words, blockchain is a log of recorded and distributed data secured by encryption that is difficult to hack or tamper with.
The interlinked blocks are supported by automated verifiers hence, every new transaction must be validated to pass and get encrypted.
This interlinked interrelation makes it difficult to change just one piece of information in the blockchain to hide or steal a cryptocurrency.
Note: As crypto forensics evolve, stolen bitcoins are becoming traceable and crypto theft will come to an end. A typical case was in 2021 where a $32million crypto theft at a UK based exchange called Dooga was traced and reclaimed
5. Cryptocurrency Is A Hoax
Cryptocurrency is not a hoax. At least, more than 10 years in the system should expose anything digital that is a hoax.
Big investors, merchants, retailers are trading in cryptocurrency and doing so as part of an investment plan.
Governments have started accepting and are deliberating on how to infuse it into the system.
6. Cryptocurrency Does Not Have A Value.
People put a value on things they understand and hold in high esteem. And that varies from person to person. Your brand new Honda motor is worthless for someone who doesn’t need it.
If you happen to be among the first investors or buyers of Bitcoin in 2009, by now, you would have been a millionaire.
The value then was just a few cents, but 10 years later and the value is $66,000 per Bitcoin in 2022.
The more big companies and investors realised its liquidity and security and have jumped into it, the more people follow suit, learn, use and appreciate it. There and then the value appreciates.
And as long as the world goes digital, cryptocurrency will continue to have more value.
Note: Cryptocurrency value will fluctuate just as any currency depending on consumers’ and investors’ sentiments, demand and supply, etc.
7. Cryptocurrencies Are For illegal Acts
This is one of the oldest cryptocurrency myths that reigned heavily in the early ages of digital money.
Every money in history has once been used in an illegal transaction. And so, yes, digital money has been used and is still being used by fraudsters and criminal organizations.
The good news is the rate of illegal activities about cryptocurrency has dropped as of 2021 to as low as 0.34% of all cryptocurrency transactions.
Though 2021 and 2022 has seen above $11.8 billion theft and scam in digital money, $2.8 billion of that is as a result of a relatively new scheme where fraudulent developers develop what appears to be genuine cryptocurrency projects, then they offer ICOs and then disappear with investors’ money.
Crypto-related crime may be at an all-time high, but researchers note that the growth of legitimate cryptocurrency usage far outstrips the growth of criminal usage.
Transactions involving illicit addresses represented an all-time low of just 0.15% of the $15.8 trillion in total crypto trade volume in 2021.
The evolvement of digital money forensics and governments’ effort in cracking down on the usage of digital money for fraud such as anti-money laundering schemes and countering terrorism financing.
These cryptocurrency myths won’t confuse you much if you have much knowledge about digital money, how to safeguard, and trade or use your cryptocurrency.
One thing to know is that digital money is still in a developing stage. Hence investing in any cryptocurrency or an ICO is very risky, – though that is what defines investment and success in it – therefore go in with only what you are willing to lose.
Bearing in mind that every business or investment is a risk – win or lose.
Read: Best Cryptos To Buy