Bitcoin, the original cryptocurrency, might turn out to be an enormous hypothetical illusion for hasty investors. Despite its demand, several people have prior knowledge of how cryptocurrencies work, and they still find them even more confusing. Let us talk briefly about its definition.
Cryptocurrency is a digital currency that serves as a means of exchange that engages cryptographic protocols for the security and authenticity of transactions. It works with Blockchain technology, which any officials or government is not controlling. Being decentralised is the main reason why transactions are unconditionally safe. On the other hand, we can’t deny that media critics mischaracterise and misinterpret Bitcoin. For some reason, it became a speculative tool.
Let’s dive into some of the most common misconceptions about cryptocurrencies:
Cryptocurrency is an unlawful form of digital money and used for illicit schemes.
Cryptocurrency being an illegal form of money, is one of the most common false claims that cryptocurrencies have been accused of. Even though Bitcoin is dynamic and can be utilised in various purchases, some people still believe it is primarily used for illegal activities.
Many nations still do not have specific systems that control or ban cryptocurrency. The decentralised property of bitcoin defends these false claims and challenges authorities on using it legally in different deals. It is true that in some countries, crypto-assets were mishandled and applied for prohibited activities. Still, the presumption that it is mainly for illicit schemes is entirely false and undeniably wrong.
Crypto exchanges are not taxed.
It is assumed that crypto-based exchanges are non-taxed, but this is just another assumption. This digital currency requires users to be registered and paid for their earnings. It is not a guarantee that it is decentralised; that is why it is tax-free. Crypto taxes are based on the IRS. They are being treated as capital assets in which they are taxed whenever they are sold at a profit.
Cryptocurrencies are hackable.
Another presupposition is that cryptocurrencies are hacked easily. This misconception is easily disproven as the bitcoin network is supported by blockchain technology, verifying that all data recorded are valid. It is not a central server that operates it, but a massive network of computers, making it more difficult to hack. In addition to this, blockchain assures all transactions are secured since they are saved in blocks of concealed data.
Bitcoin is just for the digital-savvy
Another assumption is that one should be proficient in technology to be tuned to cryptocurrency or be a bitcoin investor. You do not need to be a technological expert.
There are no prerequisites or special skills required for you to store and exchange bitcoins. Like any other thing, there will always be a process, a learning procedure, and tools that will help you along the way. No commanders are commanding you. Take your time to learn and adapt its features.
Other crypto-assets don’t matter.
The reason why Bitcoin is still popular today is the highest exchangeability in the crypto world. But, it is a false claim when they declare that it is the only crypto asset that matters. Even though bitcoin is still at the top of the list, several cryptocurrencies are also making a name. Ethereum’s creating its way to hit a new milepost in the market. Believing that Bitcoin is the only crypto asset that exists is a huge mistake.
Cryptocurrencies will be banned
Because of ineffective attempts for regulation, some countries banned cryptocurrencies. However, one of the counterparts in banning bitcoin is that blockchain technology was praised for its transparency and security in handling transactions. It is a fact that there were countries that imposed restrictions, but there are still nations that are willing to enhance and attempt regulations in cryptocurrencies successfully. As the digital currency expands, bitcoins remain on track.
The Final Decision
With all the premises mentioned above, including personal hesitations, and different speculations, one should have a more profound comprehension to weigh myths or misconceptions. It is essential to identify what are facts and what are just pure opinions. We cannot deny that there are still those who do not allow cryptocurrency as their mode of payment; renowned and huge companies have already accepted it (Expedia, Microsoft, Intuit Services, PayPal, etc.) Fallacies are, unfortunately inevitable. However, we are also capable of giving a just verdict.
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