In connection with the increasing popularity of Bitcoin and cryptocurrency in general, a huge number of myths appeared around it. Unfounded assumptions and myths must be dispelled in order to show the main market cryptocurrency asset as it is.
Myth 1: Bitcoin – the same cryptocurrency as other available in the market
One way or another, virtually all available cryptocurrencies in the modern market are subject to control by the developers and are characterized by the following features:
- The release of tokens occurs when developers need it.
- As a result of an attack on a central system that supports the functioning of cryptocurrency, users may lose their funds.
- Operations in the market are carried out according to certain protocols and under the supervision of certain bodies.
In turn, Bitcoin is a fully decentralized independent cryptocurrency, which excludes the above-mentioned problems in the trading operations.
Myth 2: Bitcoin cannot be applied in those trading operations where it is necessary to calculate the monetary or gold equivalent of the price.
Comparing Bitcoin with gold as an exchange currency and a guarantor of value, the cryptocurrency has some advantages:
- The convenience of carrying out of transactions and storage on digital wallets.
- Accelerated authentication of the transaction or funds.
If we compare cryptocurrencies with fiat assets, then they too have their advantages over the main exchange currencies:
- The output of new tokens on the market can be predicted.
- The absence of control by state bodies and exclusion of interference by third parties and companies.
Bitcoin also outperforms electronic money with some specific properties:
- Increased level of confidentiality of user information.
- No risk of freezing user assets.
Myth 3: The cost of Bitcoin is determined by the operating time of the computing processor
This myth is not true since the value of a particular currency is determined by the rating on the general exchange market. Since the owners of Bitcoin assets tokens cannot exchange it for processing power. Moreover, given the fact that very large capacities are needed for mining. Bitcoin does not have his own confirmatory reserve.
The release of the cryptocurrency is taking into account the processor’s expended computing power, but the structure of the Blockchain network is still unified. In addition, the Blockchain network is completely protected from attacks, which further increases the price of Bitcoin in the general market of cryptocurrencies.
Myth 4: The high cost of Bitcoin is not justified since it does not have assets to confirm the value.
When gold was used as a fiat currency, it also did not have a value confirmation and provision.
Myth 5: The cost of Bitcoin is determined by the cost of energy and the processing power for mining
This statement is an attempt to link the mechanism of the work of the cryptocurrency and the general economic theory of the value of labor. For cryptocurrency it is not applicable.
In the general market, the value of a token is determined by its popularity among users and by the activity of using it in transactions and trade. In addition, the value of the cryptocurrency is determined by the capabilities of the platform and the advantages in speed and security level of user transactions and private information.
Myth 6: Bitcoin does not have its own value at all
Many things have a cost much higher than the market. Consider this situation with the example of gold – it is used to confirm the value of different currencies or to save investments. At the same time, the practical sphere of gold application is industry, electronics, and art. Because of its historical value, gold is still used as an exchange currency, but this does not determine its advantages over the cryptocurrency.
Myth 7: Bitcoin is officially illegal, as market mechanisms of trade are not controlled by public authorities.
As an example, let’s take a chicken. Officially, it is also not a monetary asset, but no one prohibits its sale or exchange for other things.
Myth 8: Bitcoin supports international terrorism, undermining the national economy
Bitcoin never officially supported any acts of aggression. Cryptocurrency cannot impose or incline people to violence, as it is used simply to transfer funds.
Myth 9: Using calculations in the cryptocurrency, you avoid paying taxes
This factor depends on the person himself. Exchange cash is used for cashing assets in the сryptocurrency. Operations with them on a large scale can be taxed according to the laws of different countries.
Myth 10: With the active development of the mining sector, the value of each bitcoin falls.
Mining bitcoins requires large computing power, and over time the number of tokens mined decreases. Over time, mining will cease altogether.
Myth 11: Confidentiality of transaction data and users cannot be protected by unchecked cryptographic encryption.
To support the work of the Bitcoin network, reliable industrial algorithms are used. The system for protecting cryptocurrency transactions and personal information is one of the most complex in the world.
Myth 12: The first owners of Bitcoin received unfairly great rewards.
Awards to the first owners are quite fair since they used the Bitcoin network even when cryptocurrencies were not so popular. They acted at their own peril and risk.
Myth 13: The total number of Bitcoins is only 21 million, which will not satisfy the global market.
According to the general plan for the emission of Bitcoins, their total quantity will be 2099999997690000. This is more than enough to meet general market requirements for cryptocurrency assets.
Myth 14: Bitcoins are stored in virtual wallets. If you copy them, you can double the funds
Digital wallets have quite a serious system of protection from both hacking and attempt to conduct off-system manipulations with cryptocurrency assets. If you give access to your wallet to third parties, then you will simply lose the funds there.
Myth 15: Lost tokens cannot be recovered.
Bitcoin is divided into Satoshi, and 1 Satoshi is 0.00000001 BTC. Pay close attention to transactions, so as not to lose funds, and insignificant losses in the form of several hundred Satoshi and are completely invisible at the current Bitcoin price.
Myth 16: Bitcoin can be a financial pyramid.
To begin with, let us consider the mechanism of the operation of the financial pyramids. The founders of such schemes guarantee a high profit to depositors by attracting new customers. Attachments to Bitcoins do not promise huge profits, and developers are engaged in improving the mechanism of the cryptocurrency, rather than attracting new users.
Myth 17: Due to a decrease in the number of tokens in the mining process, a spiral of deflation may form in the course of time.
In the market, cryptocurrency, deflation is manifested to the same extent as standard economic factors affect the everyday life of a person. The chances of a stable deflation performance at the cryptocurrency market are approximately equal to the chances of its manifestation in the basic economic model.
Myth 18: Ideas of market formation Bitcoin unacceptable because of uncontrolled inflation
Inflation is the result of an increase in the general level of prices for goods and services due to the gradual depreciation of the currency. The only reason for the inflation in the cryptocurrency market is a sharp drop in demand.
Myth 19: The main part of the users of the cryptocurrency market consists of anarchists, conspirators and other marginal sections of society
Among the users of the market, at the moment, it is possible to meet large and respected investors with the same probability as the above-mentioned personalities. The market of cryptocurrency significantly expanded its audience.
Myth 20: If one network user can provide enough computing capabilities, then nothing prevents him from capturing the entire network.
In part this is true. But to support sufficient for domination in the system of computing power at the moment will require multi-billion assets.
Myth 21: The use of Bitcoin is a direct violation of the law.
No, it’s not. In the world, there is no official regulation of the activity of users of the cryptocurrency market.
Myth 22: It is impossible to reserve part of the savings in Bitcoins in an ordinary bank.
It is possible, after additional manipulations:
- To begin with, the bank accepts a contribution equivalent to the selected currency relative to the current Bitcoin rate.
- A separate financial institution is reserved.
- From these funds, loans are issued at interest in terms of the selected fiat currency.
- The funds are credited to your account and you will, in any case, make a profit in terms of ordinary money.
Myth 23: The existence of retail outlets of Bitcoins is impossible.
Due to a long time of transactions, especially with small amounts, this judgment is partly true. However, as a guarantor of buying a certain number of tokens, you can get documented confirmation of the transaction, and the tokens themselves will come to the account after a certain time.
Myth 24: When there are 21000000 tokens produced, the production will end.
When production of Bitcoins becomes impossible, events will develop with respect to two options: either Bitcoin will increase dramatically in price or completely lose relevance.
Myth 25: Inability to cancel a confirmed transaction.
This is done specifically to prevent fraud. The transaction cancellation mechanism actually allows you to return funds, but they will become available not only to you – they can be removed by all those who have data about the transaction.
Myth 26: Quantum computers can disrupt the mechanism of the market of cryptocurrencies.
In theory, this is possible and so, but this does not negate the general utility of both quantum computers and cryptocurrencies.
Myth 27: Bitcoin mining harms the environment due to high energy consumption
The process of Bitcoin mining can be associated with environmental damage, but no more than the release of conventional paper money, the building of houses or gold mining.
Myth 28: Bitcoin is poorly suited for household transactions because of the unstable price level
These rumors are related to the fact that after paying for goods or services, the Bitcoin must be immediately sold to receive an equivalent amount in a fiat currency. But this is not necessary since it is possible to hold a certain number of Bitcoins for further sale at a more favorable rate.
Myth 29: Transactions in Bitcoins support the shadow economy, as did Flotz and E-gold
Developments to improve the operation of the platform and the cryptocurrency market, as well as the introduction of cryptocurrency settlements in the general economy, allows reducing the level of involvement of illegal units and criminal structures.
Myth 30: Bitcoin faces liquidation, like Liberty Dollar
Liberty Dollar was a very risky and unreasoned project. Its goal was to introduce a new exchange currency in the United States of America with collateral in the form of valuable metals such as gold. As a result, no one officially recognized the Liberty Dollar, and in the process of releasing it to the market, the project was accused of issuing counterfeit notes and coins, which was a direct violation of the federal law and ended with the closure of the project.