Common Myths About Cryptocurrency

Close up of girl's hand placing the last jigsaw puzzle piece with word Facts and Myths

For many people, the world of cryptocurrency seems quite daunting and intimidating. These views are even made worse by commonly held misconceptions. Although cryptocurrency is one of the most talked about topics in the digital age, it has become a target of misinformation.

Since cryptocurrency is quite a new concept, there is a plethora of uncertainty surrounding it. To help you separate fact from fiction, you will find some of the most common myths about cryptocurrency below.

Cryptocurrency Is Only A Fad

In the recent years, you've probably been bombarded with thousands of headlines about cryptocurrency. It may be quite tempting to consider cryptocurrency a passing fad. However, this can't be farther from the truth.

Nowadays, cryptocurrency is a new and unique way to generate income and reduce expenses. Cryptocurrency has slowly become a new type of wealth storage that has massive potential. For example, the value of Bitcoin, the world's top cryptocurrency, reached a staggering $15,000 in 2018.

Mistakenly Think Blockchain Is The Same As Bitcoin

Because of the popularity of Bitcoin, many people are confusing it with blockchain. However, the two are not the same. Bitcoin is a type of cryptocurrency which can be used for trading. On the other hand, blockchain is a public ledger which gives people the means to have access to the network and history of transactions.

Blockchain Information Cannot Be Accessed By The Public

One of the major upsides of Blockchain is that it can be accessed by the public. Through this technology, everything is out in the open. Cryptocurrencies have their own open registries which trace the amounts transferred from one entity to another. Meaning, everyone can see transactions in the public ledger.

Blockchain Is Only Used For Data Storage

People who are not familiar with blockchain often think it is only used for digital wallets. However, blockchain is responsible for the exchange of capital. Whether you want to send or receive your digital currency, you make use of blockchain technology.

Cryptocurrency Will Soon Be Discontinued

Many people think big organizations or even the government could control and even shut down cryptocurrencies. However, cancelling cryptocurrency is impossible because they feature a decentralized system.

Executive Order 6102
Executive Order 6102: Made it illegal to own gold in the United States.

The Time to Invest in Cryptocurrencies Has Passed

You might have wished you already invested in cryptocurrencies some time ago. However, it's not too late; Cryptocurrencies are at an all-time high and now is one of the best times to invest.

Don't tell yourself it's too late because many analysts believe the value of some cryptocurrencies will reach $50,000. However, before you invest, do research.

Cryptocurrencies Are Only for Tech-Savvy People

Although cryptocurrencies might be complicated, you don't have to be a tech-savvy person to understand how cryptocurrencies work. If you have an internet connection and a browser that can access trading platforms, you can invest in cryptocurrencies (see link below). Furthermore, hardware wallets and even mobile wallets have become very user-friendly.

Our review of commonly used crypto exchanges/trading platforms: Finding The Right Cryptocurrency Exchange

Cryptocurrencies Don't Have Value Because They Are Intangible

Countless non-traders think cryptocurrencies do not have a real value because they cannot hold it in their hands or store it in physical wallets. However, the only major difference between cryptocurrencies and the money in your bank account is that you have your cryptocurrency stored in a digital wallet. Cryptocurrency is no different than worthless paper money- both act as a storage of wealth due to their acceptance as legal tender.

Cryptocurrencies Are Only Used By Criminals

Because of its anonymous nature, many people think cryptocurrency was made for criminals. However, its amazing features are also very useful for law-abiding citizens! If you do not want to go with banks because of your personal reasons or if your country is politically unstable, cryptocurrency may be the best way to secure your money.

zimbabwe bank notes and hyperinflation
Political instability and hyperinflation in Zimbabwe

Cryptocurrencies Can Be Hacked

If you don't fully understand cryptocurrencies, it may be tempting to think cryptocurrencies are plagued by security issues. Generally speaking, any industry has a level of security threats. However, hacking rarely occurs with cryptocurrencies themselves and is instead largely associated with intermediary exchanges. You can greatly limit your exposure by controlling your private keys and using "cold wallet" based storage.

Cryptocurrency Is Illegal

Cryptocurrency still features a gray area in some countries. For example, Vietnam permits use of cryptocurrencies as an investment but does not allow the use of cryptocurrency as a method for payment. Although there are some countries such as Russia and Pakistan that ban Bitcoin entirely, cryptocurrencies are legal in the majority of countries. Many nations such as the US, Brazil, and Canada are working on regulating cryptocurrencies by enacting legislation suitable for their economic landscape.

Evaluating Cryptocurrency

Truly, there are hundreds of misconceptions about cryptocurrency, and it is quite easy to see why this industry has become misunderstood. This confusion results from its tremendous growth and its relatively short lifespan to date.

Understanding the myths surrounding cryptocurrency is the best way to judge the merits of this technology and increase its potential to transform your life. If you want to become a cryptocurrency investor, the most important thing to remember is to be well-informed.