8 myths surrounding bitcoins

8 myths surrounding bitcoins

Myths originate from assumptions and over-generalisations. And as human beings, we never tend to stop labeling things and coming to faulty conclusions without real proof. This applies to bitcoins as well. Bitcoins are cryptocurrency and a worldwide payment system. Bitcoin’s are transacted to different places using blockchain technology.  No wonder, along with supporters, there were a lot of critics and skeptics of the bitcoin blockchain functionality.

Moreover, the complexity of the workings of the bitcoin blockchain technology leads to confusion regarding its usage and advantages. Bitcoins can be a difficult subject to grasp because it requires an understanding of cryptography, economics, and computer science. The end result is that frustrated users end up making void statements about blockchain technology. Oversimplified statements like ‘bitcoin is only for tech nerds’ and ‘you cannot make regular purchases with bitcoins’ end up maligning the image of the bitcoins as a potential digital currency. The internet is an ocean of information where any myth of false statement can get coverage. Hence, here we have eight common bitcoin myths debunked to help you clear all the prejudices and misconceptions regarding the usage of this cryptocurrency.

  1. The blockchain is the real breakthrough; bitcoins are unnecessary

It is true that blockchain technology is a breakthrough. It was the genius of an anonymous entity Satoshi Nakamoto and has many applications, which includes transacting bitcoins. Many people tend to ignore the benefits of bitcoins, once they realise that the distributed ledger and trustless security of blockchain is imperative for the usage of bitcoins.  But the truth is that mining is the backbone of the bitcoin protocol, and without bitcoin miners, there won’t be any blockchain. Bitcoin miners help keep the blockchain network secure by verifying bitcoin transactions. Thus, bitcoins are imperative for the functionality of the blockchain.

  1. You cannot make regular purchases with bitcoins

A lot of people consider bitcoins to be a mere form of investment. But that is not true. You can make use of bitcoins to make everyday payments for goods and services. Companies like Dell, Dish Network, Expedia, and Monoprix allow consumers to make bitcoin payments. Additionally, Paypal has announced a partnership with bitcoin companies and Microsoft too has begun accepting bitcoins for digital content like games and videos. Even brick and mortar stores in Singapore have started accepting bitcoins as payment.

  1. Bitcoin enables criminal activity

Bitcoins are a decentralized unlike the banking system in different countries. There is no external body that regulates the use of bitcoins in the digital world. Hence, there is a certain amount of freedom and flexibility involved in dealing with bitcoins. Hence, it is true that people make use of bitcoins to sponsor criminal activity but then they also make use of other conventional forms of payment for the same thing. So, it is unfair to typecast or label bitcoins as something only used by criminals. Bitcoins have numerous benefits over other forms of currency, and everyone should make the most of this new age currency.

  1. Bitcoin is a Ponzi scheme

Another common myth about bitcoins is that people think of it as a Ponzi scheme. Bitcoin blockchain is not a Ponzi scheme because of three reasons. The first one being, there is no central point for bitcoins. It is a decentralized system. A Ponzi scheme usually requires a founder or a leader who convinces his investors that they will make profits by investing in the scheme. The second reason is Ponzi scheme always requires new investors to pay off earlier investors. Things are different in the bitcoin world. The bitcoin system can work with any number of investors. However, the bitcoin blockchain is stronger when used by a large number of people. Thirdly, if the bitcoin system is a Ponzi scheme, then all other forms of currency were also started as Ponzi schemes, which is not true.

  1. Bitcoin is only for tech nerds

It is true that the earliest inventors and adopters of the bitcoin system were techies. But these days bitcoins are used by all kinds of people. Be it businessmen, service professionals or investors people from various walks of life have begun using bitcoins. These days more and more entrepreneurs are creating apps which accept bitcoin payments, increasing the awareness of this cryptocurrency. Also, unbanked people living in third world countries who are connected to the internet through various devices, will be able to make the most of the bitcoin blockchain.

  1. Bitcoin’s price volatility makes it useless

When bitcoins were invented in 2009, there were highly volatile but as time progresses, this trend is moving towards stability. To add to that, there are various mechanisms in place for using bitcoin networks to avoid the volatility associated with the token of value. Bitcoin companies like Circle and Coinbase allow users to store funds in US dollars or other flat currencies before making bitcoin transactions.

So, these were a few bitcoin myths busted for you. The next time you hear someone make any of these statements, you have a valid answer to contradict them.

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