It is rather difficult to soak in the fact Bitcoin is a decade old now. The most widely used form of Cryptocurrency has now become less shady than what it used to be even a couple of years back. The acceptance and usage has gone up substantially and you can also find a few Smartphones that support it. However, the myths surrounding Bitcoin still persist. These are what prevent more people from using Bitcoin or similar types of cryptocurrencies, across the world.
Below are the most widespread misconceptions and top myths about Bitcoin that need to be dissolved!
- Bitcoin is Anonymous in nature
This is possibly the most widespread myth about Bitcoin that you will hear from various quarters! The allegations of terrorist outfits and hackers using Bitcoin to fund their campaigns also exist. While such occurrences are not impossible it is not fair to say Bitcoin is totally anonymous. Bitcoin still functions in a decentralized manner and anyone can figure out where the funds are going. When the digital funds are actually traded for conventional currencies, there is no anonymity. Contrary to another misconception, cryptocurrency transactions can be tracked by authorities if fraud is suspected.
- Bitcoin Trading is not legal
This is again linked with the fact some hackers and terrorist groups used Bitcoin to mask their transactions. However, on realistic analysis, it is not prudent to blame a platform for fraudulent transactions. It is up to the users, eventually. Look around and you will find many fraudulent financial activities are being conducted using debit cards, digital wallets and these are generally deemed as safer. And, of course they are legal! What makes things dicey for Bitcoin is the fact there is no centralized agency or universal regulation (as opposed to Visa and RuPAy or PayPal) for it. In many countries, cryptocurrencies including Bitcoin are yet to be covered under the legal ambit. To be safe, you can check with a financial and legal consultant to know your country’s stand on it.
- Bitcoin Traders should be weary of upcoming regulations
This notion is spread the most by people involved in fraudulent and money scamming activities using cryptocurrencies. If you have no such intention, using Bitcoin should not be a cause of worry just for upcoming regulations! Sometimes down the line regulations for cryptocurrencies will be formed and that is actually a good thing. When bitcoin operations are regulated, scopes of frauds and scams will go down and average users will be relieved.
- Bitcoin is not infinite
There is a concept of the maximum limit of 21 million units of Bitcoin. However, that is not exactly set in stone. It will take several decades before all the Bitcoin miners can actually exhaust the repository. It is also possible owing to the type of blockchain, the protocol may get altered by a community agreement. It has also taken place in the past. It is too early to predict now.
- Bitcoin is only for the wealthy
Again, this is a gross misconception. Bitcoin, while not regulated, is a currency unit and so it is divisible much like the Euro. Bitcoin can be divided into 8 decimals and so you may purchase just one-eighth of one bitcoin. Literally, anybody can buy Bitcoin according to his/her capacity. It is true that the mass adoption of Bitcoin is yet to pick up pace but things are improving day by day.
- Bitcoin mining is akin to wasting electricity
A section of media houses published such articles-leading to creation of another misconception! It is true that the Bitcoin network uses a massive amount of electricity. On an average, the energy used by it can be enough to power up 280,000 US households. However, on finer analysis, you can realize creating any form of currency and financial transaction system involves a huge investment and running cost! Think of the cost incurred in setting up a bank branch, powering its computers and ATMs and using HVAC inside the branches. Printing cash currency is also an expensive procedure. Besides, the Bitcoin miners get paid for their services. So, once you weigh and pros and cons of mining, it does not look like unnecessary wastage.