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- 1 Bitcoin is the most popular cryptocurrency in the world which has some myths surrounding it.
- 2 These myths are misconceptions that hinder the users’ minds.
It is better to clear the misconceptions and see if any merit is related to this cryptocurrency or not.
Myth 1: Bitcoin Will Be Replaced by the Competitor
Bitcoin is the first cryptocurrency that is immensely successful. Now, many cryptocurrencies are there with advantageous features but no one has come close to this digital currency. The market cap data shows that Bitcoin is the most valued cryptocurrency in the market. As per experts, no other cryptocurrency will replace Bitcoin in the near future.
Myth 2: Bitcoin Has No Real Utilization
Many think that there is no utilization of Bitcoin in the real world. It is not at all accepted because it is not true. It has a long history of use cases in payments without banks as the mediator.
Instead, Bitcoin has become extremely popular. It is even considered digital gold because it can resist inflation. Growing companies like Tesla, Square, and the like have bought Bitcoins which are worth millions of dollars. Like gold, they are scarce and limited (21 Million Bitcoin). But gold is a heavy asset to store and carry. On the other hand, Bitcoin can be sent from one place to another digitally.
It does have a chance to be misused like any form of money is misused. But, the benefit is that the illicit behavior of Bitcoin is traceable as it is on an open chain.
Myth 3: Bitcoin is a Bubble
Bubble is the word that is used to describe the economic cycles which are caused due to unsustainable rises in market value. Bitcoin has gone through various price cycles but has recovered from them. When any new technology comes in, there is an undoubted boost and this cycle is expected.
The price eventually increases when investors realize prices are much higher than an asset’s fundamental value. Some major Bitcoin investors believe that Bitcoin will surge and go down with smaller swings and longer durations between them until at some point in the future it settles into relative stability but only time will answer this.
Myth 4: Bitcoin Does Not Have Real Value
It is considered that Bitcoin does not have real value because it is not backed by fiat currencies or gold. Although this is true, it can resist inflation which these fiat currencies can not. It is scarce due to its limited amount. This is the major criterion for maintaining its value. This ensures that the amount is reduced which keeps its price always high and rising.
Myth 5: Bitcoin Investing is Gambling
Bitcoin investing is considered risky like gambling. This is a myth because not only Bitcoin but all cryptocurrency investments involve risks due to market volatility. Bitcoin has been considered to get matured and the data shows that it has followed the uptrends in the market mostly but since the market is unexpected it has faced down cycles.
In gambling, one knows that the odds are tilted in favor of the house but due to the volatility of the market, there is no future guarantee of any cryptocurrency. Besides all the odds the previous data shows that Bitcoin has mostly shown the uptrends.
Myth 6: Bitcoin is Not Secure
This is the most common myth associated with Bitcoin. However, Bitcoin is never hacked and all the transactions on Bitcoin are irreversible.
Myth 7: Bitcoin Harms the Environment
Bitcoin mining requires a lot of energy but to determine the effect on the environment is hard. All financial organizations need energy to run, this digital currency is no different in utilizing energy for mining.
Conclusion
Bitcoin is a popular cryptocurrency and so it has many myths associated with it. Some of the myths listed above are just assumptions that do not have any proof. Hence, do not make misconceptions and invest only after full research and analysis.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
