5 Myths About Cryptocurrency You Probably Believe
No matter what industry you work in, you’ve probably heard about Bitcoin, the cryptocurrency that’s taken the world by storm. Invented in 2008 by Satoshi Nakamoto, a person or group whose identity is unknown, Bitcoin is intended to be an anonymous digital currency that can be sent and received anywhere in the world without any kind of regulatory oversight.
Unfortunately, like a lot of new things that become popular, Bitcoin has developed its own share of myths and misconceptions. If you want to know the truth behind these myths so that you can make better informed decisions about your money, keep reading. Here are five common myths about cryptocurrencies:
Myth 1: All cryptocurrencies are the same.
Myth 2: All cryptocurrencies are anonymous and untraceable.
Myth 3: Cryptocurrencies aren’t backed by anything.
Myth 4: Cryptocurrencies have no transaction fees.
Myth 5: Cryptocurrency is illegal everywhere around the world.
Cryptocurrency is a volatile industry. As a result, there are many myths that have formed over the years. If you are new to cryptocurrency, it can be hard for you to determine which are true and which are not. To make things easier for you, we have compiled a list of five of the most common myths about cryptocurrency that may very well be holding you back from making an investment in this industry.
There are a lot of myths about cryptocurrency, and I’m here to dispel them.
1. Cryptocurrency is only used by criminals.
This myth was created by the media to portray cryptocurrency as dangerous and suspicious. In fact, it can be used for any transaction that requires you to send money to another person, e.g., buying a cup of coffee or paying your rent.
2. Cryptocurrency is a fad/bubble/scam/Ponzi scheme/pyramid scheme
It’s hard to believe that a technology that has been around for almost ten years could be called a fad, but it still is by some people who don’t understand it. This myth is also related to the first one: since criminals use cryptocurrency, then it must be some kind of scam or pyramid scheme. Of course, the same can be said about US dollars – after all, they are used in many illegal transactions too!
3. Cryptocurrency is not regulated or insured
This myth comes from the fact that cryptocurrency exchanges are not regulated in many countries, e.g., the United States (although there have been attempts at regulation). This doesn’t mean that cryptocurrencies themselves are unregulated – they are decentralized networks which makes them resistant to government
Cryptocurrency is a powerful and disruptive technology with the potential to change the world, but it has its fair share of myths and misconceptions.
This article will look at five of the most common myths about cryptocurrencies and debunk them for you.
Myth 1: There’s No Limit to How Many Cryptocurrencies Can Exist
Cryptocurrencies are created through a process called mining. This involves adding transactions onto the blockchain, which serves as a public ledger. Mining requires huge amounts of computing power and costs a lot of money in electricity bills and hardware, so only those who have invested heavily can afford to mine. As the value of cryptocurrencies has risen, so too has their popularity, and more people are getting involved in mining. The result is that the number of cryptocurrencies has exploded.
However, these different cryptocurrencies don’t all operate in isolation. They are all built on top of blockchains – digital ledgers that record every transaction made with cryptocurrency – and they use these same blockchains to verify transactions. The most popular cryptocurrency by far is Bitcoin, which makes up more than half of all cryptocurrency transactions globally. Other cryptocurrencies compete with one another for popularity, but none can really match Bitcoin’s dominance.
Cryptocurrency is a new and exciting field. But it also has its own myths and misconceptions. Be sure to do your research before jumping on the bandwagon.
There are plenty of misconceptions about cryptocurrencies out there. In this blog post, I will try to clear up some of the more common myths.
Myth 1: Cryptocurrencies are not real currencies because they lack “intrinsic value.”
This is a myth that is surprisingly common. Some people believe that monetary assets can only be called “currencies” if they have some intrinsic value, such as precious metals (e.g., gold). However, this is not true.
All currencies are fiat currencies. For example, USD and EUR are just pieces of paper with numbers on them. They have no intrinsic value at all! The U.S. government has the authority to make USD a currency by declaring it legal tender, which means you can use it to pay taxes and other bills to the government (see 12 USC 5103).
Cryptocurrencies like Bitcoin also get their value from being declared legal tender by an entity with authority, but instead of a central government issuing them, they are issued through a process called mining (which is actually much more complicated than that). As long as enough people agree that cryptocurrencies have value and will accept them as payment for goods or services, they will retain their value just like any other currency.
Myth 2: Crypt