Debunking common myths about Bitcoin

As a relatively new technology, Bitcoin is surrounded by many myths which have an impact on how people perceive it. These myths have arrived since the first Bitcoin transaction was completed in 2009 and still exist today. Over the years, the digital currency received criticism, with many stating that its value is based on nothing or that it is only a speculative asset with no real-use cases. False information about Bitcoin prevents many from entering the market because they can feel confused about the core principles of the cryptocurrency and whether it is a worthwhile investment. 

And yet, Bitcoin has had ongoing success, proving repeatedly that it has long-term value and can potentially disrupt finance. Anyone who wants to buy bitcoin with credit card can do so easily, as the process only involves a few simple steps. However, it is critical to address the elephant in the room to empower investors seeking to make money with Bitcoin. So, let’s debunk the most common myths about the digital asset.

Bitcoin is a financial bubble

While Bitcoin is used as a speculative investment by those looking for big returns, that doesn’t make it a financial bubble. Bubbles occur when investors become aware that prices are more significant than the asset’s value. Bitcoin is sometimes compared to Tulipmania – a major commodity bubble that happened in the 17th century, lasted six months and never again recovered once it crashed.

However, it isn’t fair to compare Bitcoin with Tulipmania, as the former went through different price cycles, and not only it recovered from them all, but it also succeeded in achieving new highs every single time. Boom and bust cycles are typical when it comes to new technologies. For instance, Amazon’s stock declined from $100 to just $5, but despite that, it became a top company in the world in the years to come. myths about Bitcoin price fluctuations are a normal aspect of a young market, and some investors believe that, at some point, it will finally settle into relative stability. But that’s something only time will tell.  

Bitcoin is anonymous

Bitcoin is often portrayed as anonymous, but that’s just another misconception about it. Most digital currencies are pseudonymous, meaning they replace your name with a fake one. However, crypto is identifiable as the blockchain stores your wallet’s address. Any transaction on the ledger is recorded – and so is the entity that completed it. This means that even if your real name is hidden, your pseudonym (namely your wallet address) will appear on the blockchain.  

In addition, everyone can see the transactions on the digital ledger, ensuring transparency. No one can manipulate, modify or delete the data record on it once it has been validated. If there were such an attempt, every block in the system would need to altered, which is impossible. This data transparency doesn’t exist in traditional finance, making Bitcoin a reliable technology.

Bitcoin is useless

Bitcoin critics say that the digital asset doesn’t have real-world uses, but that couldn’t be further from the truth. Bitcoin’s inherent properties make it valuable – besides investing, the digital asset also used as a payment option with many stores and merchants. Major institutional investors also see it as a hedge against inflation. After all, there’s a reason why Bitcoin compared with gold – just like it, the digital asset represents a store of value that stands out from other types of investments. In fact, gold is bulky, which means transporting and storing it can be pretty difficult; but Bitcoin, on the other hand, can easily sent digitally, making it significantly better than the former.

Moreover, due to its decentralized nature, myths about Bitcoin can used to protect against censorship. Since no central authority oversees transactions, censoring or blocking transactions is impossible; allowing users to bypass restrictions from traditional banking and giving them the freedom they desire. Bitcoin’s peer-to-peer nature keeps transactions anonymous and secure, preventing third parties’ censorship.

Bitcoin investing is the same as gambling

Bitcoin has definitely experienced price volatility over the past years; – and that’s not surprising, given that the crypto market young and evolving. However, it is wrong to say that investing in crypto is the same as gambling. There’s a big difference between the two, as the former offers several features that the latter doesn’t, such as decentralization and security. Plus, gambling is mainly based on chance, but crypto relies on cryptography and mathematics.

Since the genesis block of Bitcoin in 2010, the cryptocurrency gained significant value and now has a market cap of $521.81B. While no one can tell for sure how Bitcoin will perform in the future; its long-term trendline in the past few years has been upward, which leads many to be optimistic. Besides, it seems like the asset is doing a lot better in terms of price fluctuations; as recent analysis has shown that volatility is now lower than it once used to; and this is due to the rise of institutional participants and the impact of mainstream crypto adoption.

Bitcoin doesn’t provide security

There are misconceptions about Bitcoin regarding its security; but these stem from attacks on third-party ventures and services using the digital asset. The Bitcoin network has not even once hacked ever since its inception. Countless security experts have examined its open-source code, ensuring that Bitcoin’s protocol is safe. The network is secured by computing power, and miners are distribut all across the world (there are nodes in 100 countries); eliminating single points of failure.

Corrupting the Bitcoin blockchain is pretty difficult because that would mean controlling at least half of all the computing power. However, every investor is responsible for the safety of their coins; which is why they should store their Bitcoin in an offline wallet. While entrusting a centralized exchange with your coins’ safety can be convenient; it’s important to remember they often mishandled and even hacked. So, the best thing to do is to use your own wallet.

Last words

Bitcoin has boomed in the past few years, but there are still a lot of misconceptions about it; which is why we focused on addressing them in this blog. Education is the first step in making crypto more mainstream, and since a lot of the information online isn’t accurate; it’s essential to use reliable resources when learning about cryptocurrency. So, if you interested in digital assets, don’t just believe what everyone else is saying; – do your own research and make a decision based on facts.