If you’re a techie, you probably know a thing or two about Bitcoin and other cryptocurrencies. These digital coins are widely popular and have been adopted in numerous industries. However, because cryptocurrencies can be a bit complex to understand, most people tend to believe unfounded rumours and myths about them. In this article, we want to debunk some of the most widespread cryptocurrency myths. We will arm you with solid facts about these digital currencies to help you easily differentiate truth from lies.
Myth #1: All Cryptocurrencies Are Highly Volatile
Are you planning to buy or invest in cryptos? You need to learn a few things about crypto volatility. Purchasing cryptocurrencies is like investing in something speculative, which means the value of your investment isn’t grounded. As Bitcoin holders can attest, the value can drop unexpectedly, leading to painful losses.
But not all cryptos are volatile. Tether, among the oldest cryptocurrencies, has proved reliably stable compared to the dollar. Ethereum is another digital coin that can withstand the market’s systemic fluctuations. Even Bitcoin itself is known to bounce back from market collapses.
Myth #2: You Cannot Do Much with Digital Coins
Cryptocurrencies like Bitcoin, Ethereum, Litecoin, Dogecoin, and many others offer convenient alternatives to traditional payments. However, most businesses are reluctant to accept cryptocurrencies due to their unregulated and volatile nature. But the good news is that cryptocurrencies are widely accepted in multiple industries today. It’s all about researching where to spend your crypto coins.
Myth #3: Digital Currencies Will Replace Traditional Payments
When the first Bitcoin was mined in 2009, many people speculated it would replace fiat currencies like USD, EUR, GBP, JPY, etc. But more than a decade down the line and with more digital coins launching, crypto payments are yet to replace traditional payments like e-wallets, credit cards, and even cash.
The thing is that fiat currencies have been around for centuries, with China rumoured to have launched the first currency in 1,000 CE. Many people will need to throw away their payment cards and close their bank accounts if cryptocurrencies are to be available en masse. While nothing is impossible, fiat currencies are deeply rooted in our financial and social programs.
Myth #4: Digital Currencies Are Not Secure
Central banks do not regulate cryptocurrencies, unlike their fiat currency counterparts. This has ultimately raised questions about the security and reliability of these coins. And to make it even worse, there have been several cases of scammers stealing altcoins from digital wallets.
But if you take proper security measures, these coins offer more secure transactions than fiat currencies. Cryptocurrencies use blockchain technology, which is very difficult to break. However, the platforms and software used to save cryptocurrencies can be hacked or compromised.
Myth #5: Cryptocurrency Payments Are Anonymous
A common misconception is that cryptocurrency transactions offer complete anonymity, as they do not require personal bank details. While there is some truth to this, it is essential to exercise caution, especially when it comes to online casinos that use cryptocurrencies. Here’s why cryptocurrency payments aren’t as anonymous as you might think:
Public Blockchain Records: Cryptocurrency transactions, including those at online casinos, are recorded and stored on a public blockchain. This ledger is open to all and displays every transaction, ensuring transparency and traceability.
Increased transparency: Blockchain technology has increased the transparency of financial transactions, reducing the anonymity once associated with cryptocurrencies.
Myth #6: Cryptocurrencies Are Bad for the Environment
As cryptocurrencies continue to be popular, the world has seen the rise of large mining firms. These companies require lots of energy to power their mining activities. In return, this adds to the total energy consumption, with some companies consuming more energy than small, developing countries.
But, although mining cryptocurrencies can be energy-intensive, it could be challenging to determine the environmental impact. Research shows crypto mining is more energy efficient than mining gold and other precious stones. In addition, researchers from the University of Cambridge recently concluded that cryptocurrency’s environmental footprint is “marginal” at best.
Myth #7: Investing in Cryptocurrencies is Gambling
While cryptocurrencies can experience significant price volatility, that’s normal for a budding market. Since the launch of Bitcoin, this cryptocurrency has gained long-term value, exceeding a market cap of $1 trillion. And as these coins mature, the robust regulatory structures worldwide have led to more institutional investment.
With that said, a serious cryptocurrency investor can do the maths to know the value of their coin will rise and give them profits. The same isn’t true about playing casino games, where the odds favor the house. Of course, cryptocurrency trading has no guarantee, although the numbers show that Bitcoin’s value has been rising over the last decade.
The mysteries and misconceptions about cryptocurrencies will not end soon as people become more familiar with virtual currencies. But after reading this post, you should operate with hard-nosed cryptocurrency facts, knowing the advantages and disadvantages of cryptocurrencies.