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Top 7 myths about Cryptocurrency

From last few years, interest around cryptocurrency is increased significantly and there are many easy ways for buying or getting these digital tokens online. Today, you can exchange Bitcoin to US dollar quite easily and legally. It's a common thing we notice when there is a new technology or thing in the market, lot of false facts about that tech is shared to the public to manipulate their minds.

Similarly, since the debut of crypto at the public market, there are few myths that you may hear from multiple sources. New investors in the market also fall for these myths and end up in disappointment.

Myths about cryptocurrency

Will look at some of the myths related to Cryptocurrency in this post :

Crypto transactions are Anonymous 

Many people believe that all crypto transactions are done secretly. Blockchain is a public ledger that tracks all crypto related transactions like how much was sent from one address to other. There is anonymity in crypto space, but identifying users and their details is not a big task. Many government organizations have partnered with major crypto exchanges to map address to the user.

Meme coins are the Future of Crypto

Dogecoin, Shiba Inu and many such cryptos, which are created around memes, don’t even have a strong fundamentals to support the financial transactions. And there is no constraint on the supply of these tokens, so their prices fluctuate based events like tweets from influential people and their social media handles. 

Bitcoin’s underlying technology seems outdated compared to some of the new cryptos that offer better security, faster transaction processing and more advanced technical features that enables processing of complex financial transactions. Despite all these, bitcoin still remains dominant in the crypto space and it accounts for nearly half of the total value of all cryptos. Most cryptos price variation depend on Bitcoin's price movement.

Crypto doesn't have a value

Many new Investors haven't been quite sure how to use their digital tokens when it comes to everyday transactions. All of this have contributed to the conclusion that crypto is just a fad or it will simply disappear soon.

Cryptos are used for illegal Activities

One of the oldest and common myths about crypto is that they are mainly used for illicit activity. While it is some what true that cryptocurrencies have been used by people with negative goals in mind as well as by criminal organizations, the same happens with fiat currencies as well. One of the factor behind this myth is the anonymity that is necessary to most cryptos.

It's true that anonymity and decentralization are particularly seems helpful for criminals, but they're also great for citizens abiding by the laws, who are in an politically unstable state. If you don't trust local banks with your money due to charges or if your country has the power to destabilize it, then crypto is arguably the best place to store your money.

'Coins and Tokens' are the same

Blockchain has both tokens and Initial Coin Offerings. Coins have one purpose : to act as a simple store of value. Tokens can store complex values like property, incomeutility and fungibility. Property can be anything like real estate transactions. Tokens can capture loyalty points or commodities.

Crypto is the only application of Blockchain 

The blockchain is the underlying technology on which a crypto is based. So, if you think they are the same, it's not. Cryptocurrency uses the blockchain technology to function. They are outstanding innovation all together, but they also work brilliantly on their own. There isn't just one application for blockchain. Every industry and business can use the technology of distributed network of ledgers.

Blockchains are like a perfect database that can store data, keep it safe, permanently store transactions that are traceable and cannot be hacked easily. 

Crypto will replace the Dollar

The dollar is a stable currency, especially when compared with cryptos volatility. And the dollar usually fluctuates for mundane reasons, crypto can be blown by tweets, memes which is not a great for any global currency. Since mid-week of April, Bitcoin has lost nearly dipped into half of its all time high value.

Crypto and its issuers are not registered with the SEC or any financial body, and the crypto space is unregulated as of now. Bitcoin and other cryptos are a highly speculative investment and involves a lot of risk.

Cryptos are backed by the faith of the people who invested in it. The U.S dollar, is backed by the U.S. government. Investors still trust the the U.S dollar in tough times. Cryptocurrencies are backed by U.S. dollars, giving it a stable value. So, the dollars might become less used in making purchase in coming years.


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