If you’re new to the world of cryptocurrency, you may have heard some myths and rumors floating around out there on the Internet or from friends who are trying to scare you away from investing in cryptocurrency. This article will be going over some of the top 10 myths about cryptocurrency that people still believe and/or pass around today. Just because these myths about cryptocurrency are popular, doesn’t mean they’re all true, so if you want to learn more about crypto and decide for yourself whether it’s worth your time, attention and money, this article will get you started on that journey…
1) Cryptocurrencies aren’t regulated
Some people believe that cryptocurrencies are not regulated and, as a result, are not safe. This couldn’t be farther from the truth. Cryptocurrencies are highly regulated because they have value and can be used for transactions. In the United States, cryptocurrency exchanges must register with the US government under guidelines laid out by the US Treasury Department. The IRS has also published a comprehensive guide on how to report your cryptocurrency gains or losses on your taxes.
2) They’re only used by criminals
Cryptocurrencies are a form of currency that can be used for payment and store-of-value. They’re not backed by any central bank or government, but rather rely on cryptography for security. Bitcoin is the most popular cryptocurrency in the world, with more than 16 million bitcoins currently in circulation. Contrary to popular belief, criminals aren’t the only ones who use cryptocurrencies. In fact, many people believe that cryptocurrencies have the potential to make crime much harder!
3) They’re not backed by anything
Cryptocurrency is different from fiat currencies because it does not have a centralized system of support like the U.S. dollar, for example. Bitcoin and Ethereum are not backed by any government or central bank, which means they cannot be printed or otherwise generated at will. The only way new units enter the system is through a process called mining, which involves updating the software on your computer to solve difficult mathematical problems in order to verify transactions that take place in virtual currency networks.
4) They’re not secure
Cryptocurrencies are not as secure as you might believe. They’re not backed by any government or institution, so there’s no guarantee that they will retain their value. In fact, Bitcoin values can fluctuate wildly and without warning.
The blockchain is a big ledger that tracks every transaction on the network. That ledger is stored on thousands of computers around the world, which means that an attack would need to target all of them at once in order to compromise the system’s integrity.
5) They’re not anonymous
False. Your digital wallet can be linked back to your identity through various means, and the transactions you make are publicly available on a blockchain. There’s no such thing as privacy when it comes to cryptocurrencies.
6) They’re a bubble
Cryptocurrencies like Bitcoin have been around for a long time, and they’re not going anywhere. It’s true that the price of Bitcoin has fluctuated wildly, but so does the price of any other currency or commodity that’s traded on an open market. And it’s important to remember that you can’t create new Bitcoins–the supply of Bitcoin is fixed.
7) They’re only used by speculators
Cryptocurrencies are a new type of money that can be used as an investment, store of value, or even as a medium of exchange. They’re not only used by speculators; they have real-world uses too. They’re all scams: Scams exist in every industry and cryptocurrency is no exception. But it’s important to note that cryptocurrency has one of the lowest levels of scams out there
8) They’re too complicated
The misconception that cryptocurrencies are too complicated for most people is a myth. While it does take time and effort to understand the basics, many people find that once they learn the fundamentals, it’s relatively easy to use. This is because cryptocurrency transactions are based on mathematics rather than trust in an institution like a bank or government.
9) They’re not widely accepted
It’s not that they’re not widely accepted; it’s just that they haven’t been around long enough for us to see them become commonly accepted. Bitcoin is still in its infancy and has a lot of growing up to do before it can be taken seriously as a currency. I’m sure most people have heard of Bitcoin, but have you ever actually used it?
10) They’re a fad
No, they’re not. Bitcoin has been around since 2009 and cryptocurrencies are more popular than ever. Even the Winklevoss twins (from Facebook) have invested in bitcoin, so it can’t be a fad. They’re too volatile: Yes, but that’s what makes them exciting! Volatility means that you never know when you’ll get your next big score.
There’s nothing to back them up: False again! They may seem like magic money because of how complicated they are, but each coin is backed by an idea or project and is tradable for other currencies like US Dollars.