When you first heard about cryptocurrencies, you most likely learned about them in the news or through word of mouth. Along with that basic facts, you’ve probably heard some of the myths and legends that constantly crop up around new concepts, some of which are true and some of which are false.
These misconceptions have made many individuals wary of investing in cryptocurrencies.
Let’s look at some of these myths to put some of your fears to rest. And make sure you have the facts straight before you get engaged.
“When we can no longer obtain new coins, the currency will depreciate because to the limited supply”
The fact that an intentional limit was set on the quantity of bitcoins that will ever be in circulation.
And that many other cryptocurrencies have followed suit. This was done for a legitimate reason: to prevent the currency from depreciating, which is a common concern with fiat currencies.
For Bitcoin, the goal is that coins will continue to appear for the next century,
until there are a total of 21 million.This quantity can be adjusted if the community agrees.
A vote with the majority of users can be held, and a change can be made –
this has already happened with an update that changed how payment terms are expressed. Only time will tell whether “can” becomes “will,” because the community is currently adamant that the limit remain in place.
But, of course, we don’t know how cryptocurrencies will evolve in the long run, so Bitcoin or its peers may decide to raise or eliminate their initial restrictions.
“But those coins aren’t worth anything”
To grasp the answer to this problem, you must first ask yourself, “Is gold worth anything?” We didn’t unearth this precious metal with a price tag attached when we initially discovered it.
It only became valuable because we determined it should be valued. As we once thought that a basket of eggs was worth the same as getting your horse shod. In general, currencies have never been backed by much more than the consensus of those who use them and cryptocurrencies are no exception.
“One day, instead of credit cards, we’ll use coins”
For some, this is the dream, yet it is only a long-term dream. Because there is now a restriction on the number of transactions that may be performed. There is always a delay while you wait for a transaction to take effect. Meanwhile, while the costs are reasonable. They are greater than you would anticipate from conventional trade. For the time being, cryptocurrencies are and will remain a reserve in which you can save value for the future.
Similar to gold, and are unlikely to become a normal payment option.
“Cryptocurrencies will be used so extensively by criminals that they will have to be banned”
The original concept behind cryptocurrencies was that users who decided to join the network would be safeguarded. Omit privacy by utilising pseudonyms rather than real names.
The obvious issue was that this would attract attention from the types of persons. Who rely on anonymity to avoid incarceration, such as the money launderers and drug traffickers mentioned before.
These people have used technology because they know that their crimes cannot be traced back. To them through their transactions, unlike a traditional bank account, which requires personal information.
As one of the most prominent misuses of technology, we referenced the “Silk Road,” a famed underground drug market.
But, let us not forget that when faced with issues and discomforts. Humans are much better at innovating, and cryptocurrencies will not be immune to this propensity. At the time of writing, algorithms that can be used to investigate trends in the blockchain.
Like pseudonyms together had already been built. Which law enforcement has been utilising to capture those criminals in the act. While the anxiety is understandable. Many would say that criminals have been using the old financial system just as frequently. and that the only way to remain truly anonymous will always be to cling to paper cash.
“Governments will eventually succeed in shutting down cryptocurrency”
While it is certain that some governments would like to do this and end the headache once and for all, this does not imply that they have the ability to do so. The concept of cryptocurrencies has always been that they are decentralised. Which implies that there is no central figure, no leader at the top, no one to arrest and hold accountable, and no one to turn off.
To shut down cryptocurrencies, you’d have to somehow shut down the infrastructure that’s distributed all over the internet.
“There isn’t anything stopping hackers from gaining access to cryptocurrencies”
Again, this is founded on fact, because some of the first currencies were rather easy to hack. But, security has increased tenfold since then. At least for the time being, Bitcoin has never been hacked and is thought to be difficult to break soon.
“Cryptocurrencies are nothing more than a massive Ponzi scheme”
A Ponzi scheme is a type of investment. A scheme in which investors are promised high rates of return in exchange for little risk. Remember that Nakamoto never made such a claim, when he introduced the first cryptocurrency.
And that Bitcoin’s extraordinary success has been driven by speculation. Rather than any action taken by Nakamoto. So, while the system may not fit the definition of a Ponzi scheme. That doesn’t mean the system’s users can’t convert it into one.
Be wary if you come across a group unrelated to the creators that makes such a claim about cryptocurrency. There is no human system on the earth that is fully safe from the activities of unethical users. to his prospective consumers, and the rise of Bitcoin was caused by speculators rather than Bitcoin’s actions.
”Bitcoin is dead”
This is one you’ll hear a lot, especially when one of the market’s largest cryptocurrencies has a momentary decline in value. The truth is that there are more transactions taking place on the Bitcoin network today than ever before. This is not a technology that appears to be going away anytime soon.
