Do you want to learn more about the cryptocurrency ecosystem? Planning to set up a Bitcoin wallet for the first time?
Here are a few Bitcoin Misconceptions you should know before you get started. They may be the reason why you have not been active in crypto until now.
Misconception 1: Bitcoin Is Ruining The Environment
Electricity is the driving force behind Bitcoin mining. To mine Bitcoins efficiently and earn a good return, mining equipment requires lots of power.
People often associate Bitcoin mining with something environmentally damaging because this is the major operating cost of mining.
As a matter of fact, things are very different. Mining operations are typically located in countries with very low electricity costs. There are often abundant renewable energy resources in countries with low electricity costs.
Consequently, bitcoin mining does not have the same environmental impact as some people think.
Misconception 2: Bitcoin Is Expensive
Bitcoins are expensive, yes. When compared to other cryptocurrencies. In spite of this, more people should invest and get involved.
Why? Almost any crypto exchange allows you to buy fractions of Bitcoin. There are fractional units known as Satoshis in Bitcoin. Bitcoin is made up of 100 million Satoshis.
Misconception 3: Every transaction is expensive
The Bitcoin transaction fee is based on a percentage. There are instances where some transactions take a long time to process.
However, large transactions actually proceed much more quickly than some people believe. High fees are part of the reason for this. Transactions that are large get priority.
Transactions involving Bitcoin are neither slow nor expensive in comparison to wire transfers.
Misconception 4: Bitcoin is only used for illegal activities and money laundering
Cryptocurrency is still surrounded by these misconceptions. Silk Road, an illegal marketplace, was the beginning of it all.
Despite the fact that Bitcoin was once used to purchase illegal goods and services, it is now doing much more than that.
Most people use bitcoin for investment purposes. Trusted merchants also accept Bitcoin, and some people even sell their homes and cars in exchange for it. Others donate Bitcoin to charity. Bitcoin has a lot more legitimate uses than many people realize.
Misconception 5: Bitcoins are worthless due to the fact that they are not backed by anything as traditional currencies are
Misconceptions like this are spewed by people who do not understand how decentralized financial systems and traditional banking work.
Bitcoin, it was claimed, has no value because it is not backed up. Therefore, it is only a bubble. However, national currencies rarely have any backing, which makes this a tough argument to make. Some, in fact, are inflated every year to the point of absurdity.
Misconception 6: Since bitcoins are anonymous, they are dangerous
User anonymity isn’t what it seems. On the Bitcoin ledger, all transactions are visible to the public. Past transactions are also visible.
The ledger can also be checked by anyone and specific transactions and interactions between addresses can be monitored. Digital money flows quite transparently.
Misconception 7: Bitcoin is worthless due to previous hacks
Owners and investors of Bitcoin would disagree. Millions of dollars were lost in Coincheck and Mt.Gox hacks. It’s true.
However, Bitcoin’s value has continued to rise since then, reaching an all-time high of around $68,000. Not much evidence of Bitcoin’s death.
Misconception 8: Satoshi Nakamoto has taken on several identities
Users, analysts, and developers have pondered the identity of the Bitcoin founder ever since Bitcoin gained traction on the market.
Due to the fact that the person behind the cryptocurrency never came forward, there is still no viable answer to the question – Who is Satoshi Nakamoto? The founder’s name isn’t even certain to be his real name.
Misconception 9: Ethereum is better than Bitcoin
Ethereum and Bitcoin are very different cryptocurrencies. In terms of value and technology, Ether comes in second, but it’s also very different.
Since the two technologies have different purposes, one cannot really compare them. Despite this, Ethereum is less stable than Bitcoin due to its technology branching out into different niches.
Misconception 10: Bitcoin Is A Scam
Ponzi schemes or general scams. There are plenty of naysayers among cryptocurrencies, including Bitcoin.
Nevertheless, its continuous stability, growth in value, and acceptance around the world prove the contrary.
Bitcoin – More Fact Than Fiction
It’s even possible that some people think Bitcoin doesn’t exist or that people are just losing money on the internet somehow.
Very few people understand the concept of a decentralized financial system and a currency backed by math. Bitcoin is not fiction, and although it is not represented by tangible assets, it can be used to purchase tangible goods and services.