The exponential rise of cryptocurrencies has amazed everyone because no one believed that a digital currency could obtain such high market value. Platforms like this site provide features like better technology, no fees, and friendly UI alongside analytical updates. Undeniably, the nature and features of cryptocurrencies are a mystery to many, but people are getting to know more about these revolutionizing digital currencies daily.
Unfortunately, due to lack of knowledge, many myths regarding digital currencies went viral in the early days, and some of these myths are still popular amongst millennials. Here is a list of famous cryptocurrency myths.
1. The price of Bitcoin and other cryptocurrencies is not governed by ordinary investment and economic laws.
This idea is based on the misconception that a digital currency has no financial value. People believe it is a non-physical, non-liquid asset that can’t have traded in the marketplace any way they want. Many people doubted Bitcoin’s worth when they first heard about cryptocurrency in 2013 because this was an early stage of development for Bitcoin. It took a year before various fintech companies started offering their services related to Bitcoin wallets and trading.
2. Cryptocurrencies are used only in counterfeit and illegal activities!
Often this myth is fed to the general public by media and financial institutions as they are trying to stop the rise of cryptocurrencies by manipulating market sentiment.
Cryptocurrencies cannot be considered an asset associated with crime or illegal activity because some people use these coins for trading purposes. For example, in the bitcoin network, millions of users are trading and using cryptocurrencies for their day-to-day activities.
Cryptocurrencies offer users greater anonymity, privacy, and security than traditional currencies. However, even if someone uses it in illegal activities, it doesn’t mean everyone misuses cryptos.
3. If you lose your coins, you will never be able to get them back!
While people believe that cryptocurrencies are present in wallets and when someone loses their wallet, then all the coins go for a toss, this myth went viral due to a lack of knowledge about how blockchain works and how digital currencies are present within these blocks. Therefore, the creator of the Bitcoin network designed it so that if your wallet is lost or damaged, even if those coins are lost forever, they will never return.
Cryptocurrencies do not disappear from the network but become inactive until you add them to another wallet.
4. Cryptocurrencies are not secure!
As mentioned above, cryptocurrencies don’t disappear from the network; instead of disappearing, they become inactive if lost or damaged. A single Bitcoin has no physical existence, and you can’t find it in your wallet. But at the same time, it is both very secure and safe as many parameters must be there for a transaction to occur. A user must have a source of funds to make a transaction and operate on a sound security system (like encryption) and confirmations before sending Bitcoins anywhere.
5. Cryptocurrencies are volatile!
This myth is based on people’s ignorance of the market value of cryptocurrencies which affects the volatility of their price in terms of currency exchange rates like USD/EUR/JPY etc. For example, if a person buys a cryptocurrency at $1000 and it goes up to $3000, some people will consider it an increase in value, but obviously, others will say that their investment did not go well.
Cryptocurrencies aren’t volatile because the demand for cryptos is growing, and more people are investing in Bitcoin and other digital currencies. However, it’s also possible that many users want to sell their coins for fiat money, but exchanges do not provide that facility to avoid market manipulation.
6. Central authority issues cryptocurrencies.
While cryptocurrency was designed and released through the Bitcoin network, people still do not know how to use digital currencies. They believe that there is no one to issue or control them, which may be due to a lack of knowledge of the developer of Bitcoin. Anyone can get their digital currency through cryptocurrency crowdfunding, a widespread way of creating a new coin or token in the market these days.
