Even though the beginnings of cryptocurrencies were not so good and people did not trust them in the first place. But crypto managed to emerge as a stable currency in the modern world.
It is now a new area of investment and has raised a community of crypto investors.
Like every other newly emerging field, cryptocurrencies are also covered in many myths about them. These myths are so intense that many people still do not believe in this digital money. There is so much misinformation floating around the field, and it makes people misunderstand. All these myths should be busted so that people can get more and more benefits from cryptocurrency.
Cryptocurrency mining myths
1. Cryptocurrency is based on luck
Bitcoin or any cryptocurrency mining requires a large number of skills. Because you have to solve puzzles to get a code and mine a bitcoin, a miner should have skills and knowledge about computers and their technology. It is not easy for a person who does not understand digital financial assets. So it is a wrong statement to make that Bitcoin mining profits you only if you are lucky. There is a small percentage of the contribution of luck as well, but it is not the real cause of success.
2. Too much volatile
Bitcoin is indeed more volatile than government bonds. But this does not make crypto a bad currency. In fact, every currency was volatile during its initial stages. Gold was also too volatile when its value was increasing. The truth is that these cryptocurrencies will also get stability as the other currencies in the world after some time.
3. It wastes energy and is bad for the environment
The process of Bitcoin or any cryptocurrency mining uses a bounteous amount of energy. This is because the miners utilize a large amount of computer power to secure the network. This may grab the people’s attention and might make them think that all of the energy is getting wasted. But when you compare the value a single cryptocurrency generates with the value of energy used, you definitely understand that mining is not extinguishing the energy. The value of a bitcoin network is $1 trillion and serves millions of people.
The overconsumption of energy has a solution. Power the Bitcoin mining process with renewable energy so that we can save non-renewable energy.
4. Cryptocurrency is easily hackable
There are instances that cryptocurrencies are hacked—but thinking that it can be done easily.
Is wrong. Hacking a cryptocurrency is extremely tough because it has many layers of technology to it. The Blockchain ensures that it is kept safe.
5. Blockchain technology and cryptocurrencies are the same
We can not separate Blockchain technology from cryptocurrency, and that is not what we are trying to say either. Cryptocurrency is digital money that is created based on Blockchain technology. Apart from crypto, this technology is also used in sharing medical data and monitoring logistics. Crypto is one of the outcomes of Blockchain technology. Blockchain technology is used when crypto transactions are done to create a permanent block and add it to the Blockchain.
6. Cryptocurrency can be counterfeited
As everything from mining to trade and every transaction of cryptocurrencies happen online, it is very easy for traders to think that it can be counterfeited easily. But this is not true. Cryptocurrencies use cryptography, a technique that generates unique codes for every currency and protects its information. Even Though the transactions get recorded, it is not easy to track the transactions and create a duplicate of them. It is impossible to do more than one transaction with a single operation.
7. Cryptocurrency is Complicated to deal with
The process of mining crypto needs the knowledge of technology; trading doesn’t require any of those skills. It is not different from traditional trading or investment procedures. The coding aspects will be managed in the backend, and traders don’t have to worry about it. If you are interested in trading cryptocurrency, click here.
8. Crypto transactions do not involve any tax
There are no banks or government authorities connected with the crypto transaction. That is why many people tend to think that there is no tax on crypto transactions. This is also a wrong assumption. IRS-Internal Revenue Service keeps an eye on the transactions of cryptocurrencies. The transactions should be registered and have to pay tax.
9. Crypto transactions will remain anonymous
This is one of the prominent myths among bitcoin traders. Any cryptocurrency can be traced up to a certain extent. All the transactions that happen are recorded in a ledge of algorithms. This ledger keeps the record of time, transactions, and also the wallet. Blockchain performs the verification of the transactions as well. “Every transaction of the crypto can be connected to real-world identities,” says Bitcoin.org. “Cash is more anonymous than crypto,” says Business Insider.
10. Only bitcoin matters
Bitcoin is the first cryptocurrency that came into use. That’s the reason why it is so famous and in extensive use. Another benefit of bitcoin is its liquidity. Conversion of Bitcoin into cash or vice versa is very easy, and it becomes more convenient for people to use it. Because of its universal use, traders may start to think that other cryptocurrencies are less important compared to bitcoin. This is not true, and other cryptocurrencies like Dogecoin and Ethereum are also important.
While having all these myths floating around, cryptocurrency is still growing towards becoming a stable currency. A wise investor or a business person will surely take this field seriously and ensure profit for his future. Like any other type of investment, cryptocurrency has its risks. But the applications and increasing acceptance among people will make it outgrow the risks and be a prominently used one.
If you were the one who believed in these myths, we think that we have successfully broken at least some of them through this article and would consider investing in crypto.