Ever since the introduction of cryptocurrencies, there have been a lot of confusion and myths surrounding this “next big thing”. If you’re determined to dabble into this market, it’s extremely important that you have a solid grasp of what you’re getting into.
Myth 1: Blockchain = Bitcoin
Thanks to the price spikes of Bitcoin, people are more familiar with Bitcoin than blockchain, its root technology. Blockchain enables peer-to-peer transactions to be recorded on a distributed ledger throughout the network. Bitcoin is a cryptocurrency that can be exchanged directly between two people without passing through a third party like a bank. In a nutshell, the blockchain provides Bitcoin’s public ledger, an ordered and timestamped record of transactions.
Myth 2: Cryptocurrencies Have No Real Monetary Value
Many people think these digital assets have no real value and are just codes. Just one glance at the current cryptocurrency rates will tell you that this is not true at all. The price of 1 Bitcoin is more than enough to buy a decent car. In addition, blockchains have a role to play in improving the logistics of record keeping, and even the emergence of an advanced energy grid. Indeed, both the blockchain and cryptocurrency have real worth.
Myth 3: Cryptocurrencies Are Mainly Used for Illicit Activities
While cryptocurrencies have been used by individuals with nefarious goals in mind as well as by criminal enterprises, the same could also be said for fiat currencies as well. Due to its decentralization and anonymity nature, Bitcoin has gained popularity in black market and dark net transactions. You should bear in mind that it’s the transactions themselves are illegal, not the cryptocurrency.
Myth 4: Crypto Transactions Are Anonymous and Untraceable
A lot of people are under the false assumption that all Bitcoin and crypto transactions are anonymous. It might be true in the past, but things have changed quite a bit. Many government organizations have established relationships with major exchanges to complete the mapping of the address to the owner. Since crypto exchanges are centralized, they have KYC information about their clients, it’s increasingly impossible to remain completely anonymous.
Myth 5: Crypto Won’t Be Accepted in Stores
Many stores now accept the bitcoin, including major brands like Starbucks. This list continues to grow on a daily basis. With tech giants like Facebook getting into the space with their own cryptocurrency, Libra, the trend is more likely to accelerate than ever before.