Bitcoin and cryptocurrency have burst onto the scene over the past few years, hitting mainstream attention in 2017 when Bitcoin’s value skyrocketed. Many people are captivated by this new financial phenomenon and you may be wondering whether you should dip your toes into the crypto waters and bitcoin trading as well.
List of Myths Surrounding Bitcoin and Cryptocurrency
Below highlighted are some common myths about Bitcoin and cryptocurrency that are debunked so that you can see what’s really going on with these new forms of money.
Nobody uses cryptocurrency
This is an easy one to debunk. A lot of people are using crypto, but they aren’t necessarily telling everyone about it. Some believe it is because of potential tax concerns, others say that it is about protecting themselves from theft or hackers, and some simply prefer not to broadcast their wealth (or lack thereof).
Currency is printed by governments
Yes, central banks do print currency. But so do private companies like Casascius, which create physical coins of value that are redeemable online. Just like fiat currency, cryptocurrency is created by an entity and then exchanged digitally on a secure ledger system with other people who agree that it has value. Most governments don’t support or oppose cryptocurrencies. However, there are governments who have banned cryptos in their respective countries.
Bitcoin transactions are anonymous
FALSE. While it’s true that cryptocurrency markets are volatile, they aren’t any more volatile than stock markets. This is a myth heard from individuals who are not that much familiar with the working mechanism of cryptocurrencies. So, let me explain volatility in the context of bitcoin. The price of Bitcoin goes up when demand exceeds supply at a given moment in time.
The price of bitcoin changes a lot, making it speculative
Many say that one of bitcoin’s big advantages is its stable price. The cryptocurrency remains secure even when its value is extremely volatile. But if you think about it, it doesn’t make sense that a coin which was worth $100 three months ago would be worth nothing today, just because its price has dropped.
Banks won’t accept bitcoin for payments
Banks won’t accept bitcoin because it isn’t regulated or backed by any government. Instead, banks see bitcoin as a threat to their business models. If a bank allows its customers to pay in cryptocurrencies, then these people will most likely be less likely to use banks for other payments in future.
List of Facts Surrounding Bitcoin and Cryptocurrency
- Banks accept cryptocurrencies
Today, many companies have started accepting payments in cryptocurrencies. One popular tech giant company is Microsoft that accepts Bitcoins. Several nations like Japan, Estonia etc. have accepted bitcoin as a legal tender for goods and services.
2. Governments issue fiat currency, including central banks.
Governments print fiat money. Because it’s printed on paper, it has no intrinsic value. Currencies are created out of thin air, at will, by governments or central banks.
3. Physical bitcoin coins exist and you can buy them.
When it comes to cryptocurrencies, the majority of the individuals in this field are unknown to the fact that some coins exist physically. One such coin is called Casascius Coin, which was designed by Mike Caldwell. He has minted a total of 50 BTC (to date) with a face value of one BTC each. However, these coins have never been claimed for payment because their value exceeds that of their physical worth.
4. There are no chargebacks with cryptocurrencies.
When you pay for something with a credit card, there’s an option to cancel that payment for a limited time (usually about three days). That’s why it’s so important to double-check your records whenever you are making any type of transaction with it.
As you can see in the aforementioned points, Bitcoins and cryptocurrencies are still a very new industry with a lot of potential in terms of financial profits. There is no shortage of myths out there when it comes to cryptocurrencies, but now that you’ve checked out these top myths, you should have a better understanding about how cryptocurrencies work. So, what makes you wait? Step into the world of cryptocurrency investment today.