Busting Crypto Myths: Common Misconceptions About Cryptocurrency

Cryptocurrencies, Bitcoin, in particular, is taking the worldwide trend by storm since its introduction decades ago. The interest of mass media and investors is because of cryptocurrencies’ promising blockchain technology. Cryptocurrency can be acquired through platform exchanges and bitcoin mining. This advanced technology enticed enthusiasts into the cryptocurrency journey. You should always choose a regulated and reputable platform to start your crypto journey.

Crypto Classifications:

Crypto assets: Bitcoin is classified under crypto assets. These kinds of cryptos are highly influenced by economic and trading behaviour. They are considered as stores of value and deflationary.

Crypto Utilities: Blockchain technology belongs under this type. These are advanced technology utilise to run different smart contracts, systems, deals and financial programs. Ethereum is a perfect example of crypto utilities. They are used to run several blockchains, and the token used is called Ether.

Crypto Currencies: Digital fiat currency is one example of currencies. Digital fiat money is not influenced by federal gold reserves but rather the economic performance of the country issuing it. Therefore, making it inflationary by nature.

Crypto Securities: Typical scenario of crypto securities uses blockchains on trade like stocks, assets and properties.

Defining blockchain

Blockchain isthe technology used by the entire crypto industry and other digital assets. It is the science behind crypto transactions, generally speaking, it is the heart of Bitcoins and other cryptocurrencies. In addition, Blockchains serves as the decentralised mechanism that controls and maintains crypto. They are also known as a public ledger, where all crypto transactions are stored, tracked and verified. Because of their decentralised nature, blockchains are not owned or controlled by central banks or federal governments. They are usually operated through connected servers all over the world.

Cryptocurrency is considered the most secure and safest decentralised technology that cannot be counterfeited and impossible to hack. It is protected by strong encryption known as cryptography, and all transactions are protected through a stealth address algorithm.

However, regulators and traditional investors often misunderstand because it is an emerging and developing technology.

  1. Myth: Buying, transacting and holding cryptocurrencies are illegal.

It is not illegal to buy or sell any cryptocurrencies. Provided that investors transact with legitimate and trustworthy crypto exchanges and trading platforms. Brokers develop these platforms, experts and software developers to give neophyte and experienced traders guidance and trading methods that may help them with their crypto journey. Often Cryptocurrency’s risk of market volatility and trading loss are discussed with investors. In line with this, they are also provided with rigorous trading methods that may guide them to earn substantial revenues.

Big companies like Square and MicroStrategy are also investing and buying Bitcoins. In addition, federal regulators like the New York State Department of Financial Services also expressed their interest in the possible formulation of guidelines and regulations for cryptocurrency trade.

  1. Cryptocurrency is only used to conduct money laundering and other illegal transactions.

This may hardly be possible because cryptocurrencies are created with mathematical codes and advanced blockchain technology, making them safe, secure and traceable. Moreover, Cryptocurrency was also launched for a decade now and surpassed two worldwide recessions, and this may confirm that this is not a money laundering instrument.

  1. Cryptocurrency is just a myth and is not valuable.

Legitimate statistic websites are reporting the daily market value of cryptocurrencies. Various news articles like Forbes and Business Insider also reported the digital assets market price history that initially started at $0 and reached an all-time high of more than $63,000 last April 2021. It is gaining popularity in trade markets and investment sectors as a new asset class. Bitcoin has already classified hedges similar to digital gold and can be a store of value through inflation.

  1. Security is a question for Cryptocurrency.

Popular, high-profile scams and virtual thefts had haunted the cryptocurrency realm. Criminals usually target the vulnerability of digital wallets and other features of the cryptocurrency industry.

However, it is significant to note that the mining network and strong encryptions of cryptography operate to keep the blockchain robust to any attacks. Furthermore, because of the decentralised and complex nature of blockchain, they are seemingly impossible to attacks and hacks.

Individual Lapses and failures of investors cannot be attributed to the entire cryptocurrency technology. Thus, investors can improve the way they handle their investments and even their non-crypto currency investments. In addition to that, federal governments and financial institutions recognise the financial technology breakthrough that blockchain offers. As a result, they are starting to adopt the blockchain system in their financial and operational procedures.

Cryptocurrencies are still a trending commodity in the investment world. Since the launch of Bitcoin decades ago, its popularity is increasing. However, misinformation, mythology and misleading data still surround the crypto world. It is essential to know that risks because of market volatility are not a myth regarding cryptocurrency.

Back to top button