Debunked: The Top 5 Bitcoin Myths & Misconceptions

Written by Mauro Sacramento - Reviewed by Coin Review Team

Published: Aug 16, 2018 | Last Updated: Oct 17, 2018

Popular bitcoin myths debunked - a list of common misconceptions that people about bitcoin. Learn how to separate facts from fiction.

2024-12-06T05:26:08+00:00

It’s hard to believe Bitcoin will be a decade old next year — it seems as if it was yesterday the mysterious digital currency populated news channels all over the world.

Given how popular it is, you’d think people would be pretty knowledgeable about it. However, that couldn’t be further away from the truth.

Bitcoin is as misunderstood as the internet was when it first showed up — which means there’s still hope for the cryptocurrency.

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Over the past few months, most misconceptions have been brought to light regarding the blockchain-powered currencies.

Nonetheless, there are still many doubts clouding the minds of the general public.

Today we bring you the five biggest Bitcoin myths which are still misleading our society and preventing stronger adoption.

Some of them, believe it or not, even the so-called cryptocurrency traders think to be true.

Here is a list of Top 5 Bitcoin Myths

1. Bitcoin is Anonymous

This has to be the biggest myth of them all — crypto enthusiasts and haters alike assume Bitcoin transactions are completely anonymous.

Many hackers and terrorists have reportedly used the cryptocurrency to either fund their campaigns or mask their illegal payments.

This is the reason why many people believe Bitcoin is a currency mainly used for illegal activities. However, as time has shown us, this is not true — authorities have busted many terrorist groups and dismantled their Bitcoin-backed operations.

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Even though people use encrypted addresses to perform transactions, due to Bitcoin’s decentralized, public nature, anyone can see where all funds go. Even an average user can see money exchanged between ‘Address A’ and ‘Address B.’

Nevertheless, the moment those digital funds are traded for fiat currencies, the last barrier of ‘anonymity’ is broken.

Cryptocurrency exchanges supporting fiat tend to ask their users to verify themselves, thus linking a real-world ID to a cryptocurrency address.

Ironically, authorities can track cryptocurrency transactions a lot easier than bank activities — no permissions are required; so much for anonymity.

2. Bitcoin Trading is Illegal

This belief takes us back to our previous point on how terrorists use cryptocurrencies to back illegal campaigns. Many people associate Bitcoin with criminal activity solely because criminals use it — many could argue the same can be said for fiat currencies.

The truth is that many countries still don’t have any regulation in place for Bitcoin. In these situations, cryptocurrencies fall in a gray area of legality — they’re neither legal nor illegal.

Some nations go as far as purposely not legislating cryptocurrencies as they don’t see a need for it.

Bitcoin traders must be wary of their national rules and follow them accordingly. Once again, Bitcoin is not anonymous, and online activities are still penalized according to the user’s domestic law.

3. Bitcoin Traders Should Fear Regulators

The biggest scammers in the cryptocurrency space most likely spread this myth, as they’re the only ones who should be scared. Regulations are not necessarily bad if appropriately applied — like anything else.

Theoretically, cryptocurrencies need to be regulated to protect people from scams and frauds. When there is a law which governs how Initial Coin Offerings (ICOs) are organized, everyone knows what to expect.

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Unlike what had happened in the past, when people invested in scam projects which vanished upon completing their goals.

Traders should not fear regulators but embrace them. It’s exactly like the saying, ‘if you can’t fight them, join them.’ Regulation will come, sooner or later.

Rather than fighting and opposing it, Bitcoin traders should change their approach and start a dialogue.

4. Bitcoin is Finite

While it may be right there will only be 21 million Bitcoin units; this is not set in stone. Over the next 100 years or so, Bitcoin miners will keep in search of those coins until the supply reaches its end — unless it doesn’t.

Due to the nature of Bitcoin’s blockchain, its protocol can be amended by a community consensus, as it has happened in the past. Even though this seems an unlikely idea at present, the possibility is there, and the situation can quickly change.

5. Bitcoin is Too Expensive to Buy

This statement sounds illogical if one has some economy knowledge. Bitcoin, being a currency unit, can be divisible like the Dollar or the Euro.

Unlike these two, you can divide Bitcoin to 8 decimals — which means you can buy one-eighth of a Bitcoin if you can’t afford the whole thing.

Anyone can buy Bitcoin, and they can buy as much as they can afford. Even when the digital currency was at an all-time high, it was still possible to buy $10 worth of Bitcoin, for example.

In summary, there are still many myths plaguing the cryptocurrency and pushing the general public away from it.

Despite popular belief, Bitcoin has come a long way from just being the preferred currency for criminals or something accessible only to tech-savvy individuals.

Nowadays, anyone with an internet connection and some change can hold Bitcoin — all the more reason for us to focus on busting these popular myths and helping to bridge the gap between fantasy and reality.

Image Credits
Feature image: Shuttestock.com
In-Post Image: Shuttestock.com

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Disclaimer

The writer’s views are expressed as a personal opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.