The origin of an asset ceases to matter when it continues soaring in value, as is the case with cryptocurrency nowadays. Amongst a variety of cryptocurrencies available today like Ripple and Ethereum, Bitcoin is also a virtual currency with solid cryptography that ensures authenticity and safety of transactions. It has been in the news since 2017, after its unprecedented boom. Over a span of 12 years, its market capitalization has reached over 600 billion US dollars.
Whenever there is a potentially disruptive and huge discovery, speculations arise. With commercial viability in the mix, rumours start spreading like wildfire. Even though it is understandable for questions to rise with a new zone of investment, there have been a persistent number of myths that surround cryptocurrency. Accompanied by such success and dark origin, it has received many criticisms and attacks which have led to unnecessary untruths surrounding it.
Since cryptocurrency is quite well in its early stages right now, the misunderstandings make it harder to approach and be used by people. They are needlessly tarnishing the image of these digital assets globally and leading the general public astray. With the upcoming online culture slowly taking over, it is time that light is shed on the truth behind some myths around cryptocurrency by doing proper research and separating the facts from gossip.
To make it easier for you, here are 5 major myths that are clouding the growth of cryptocurrencies:
Cryptocurrency does not have real money value
Perhaps the most believed myth about digital currency is that it has no real value. Not being able to see it in person causes sceptics to ridicule people who have invested in this online gold. But in reality, cryptocurrencies are global, borderless currencies that vary based on their supply and demand. They are cashless and deflationary, making them a better way of storing wealth.
Cryptocurrency is much like the money kept in banks and then used by cards. All transactions are virtual. Yet, neither its status nor its value is diminished. In effect, that is what makes it safer, as opposed to popular belief. The next point is going to further emphasize that.
Cryptocurrency can be hacked; hence, unsafe
Cryptocurrencies use chains during transactions to make them more secure. Blockchain technology is one such popular network that verifies, and distributes the received information for record purposes, but does not allow it to be copied. They make it extremely difficult for the system to be corrupted. Like any other currency, thefts are not impossible, but they can be avoided by taking appropriate measures.
The safety of digital funds depends a lot on the investor as they are the ones who call the shots. Thus, you are advised to inspect the investment of your currency and the chain being used to carry it out.
Cryptocurrencies are illegal/used for illicit activities
Another paranoia regarding cryptocurrencies residing is that they are illegal and/or used for illegal activities only. This is an outdated misconception. They are not illegal; they are in debate in some countries. And about illicit activities, their usage in such is subjective.
Criminal activities have been around way before cryptocurrency was even brought into the market. The link-up of digital currency with illegal activities is incorrect fundamentally. Moreover, unlike paper money, every transaction made using cryptocurrency is recorded and visible, through blockchain.
Cryptocurrency transactions are completely anonymous and untraceable
As mentioned earlier, blockchains can maintain the records of transactions that take place using cryptocurrency. It is visible and can be tracked. The traceability makes it less vulnerable than fiat money. Even anonymity can be dealt with during extreme cases, as it is not absolute. The majority of people using cryptocurrency are not anonymous entirely.
The layer of transparency provided by digital money is one of the highest levels. This makes it a comfortable place for investors and alarming for those who have ill intentions.
Cryptocurrency is not regulated/taxed
Despite there being no involvement of a central authority, you cannot rule out compliance with regulations and taxation. In order to conduct the operations smoothly, countries have adopted measures to regulate the cryptocurrency space proactively. Also, similar to any other money transaction, you will be taxed whenever you are paid in cryptocurrency or sell it. There are different long-term and short-term gains’ taxes that are currently in play.
Leaving cryptocurrency unexplored is an ignorant choice today. Despite all kinds of rumours and speculations, the value of cryptocurrencies, especially Bitcoin, is on a steady rise. Having such big myths debunked might have helped you understand the extent and reach of cryptocurrencies. It may not be unwise to step foot into the world of digital currency as the future is near.
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