ZoneBitcoin EditorialToday we are going to talk about myths about cryptocurrencies.
Do you think you know enough about bitcoin? Doesn't that prevent you from occasionally hearing or reading totally erroneous things about cryptocurrencies?
We don't really know why cryptocurrencies are so attractive to certain people. We cannot explain (although…) why some people are completely reluctant to use cryptocurrencies.
In any case, there are as many supporters as detractors when we talk about cryptocurrency. As with almost everything, there are myths or lies conveyed by what we call rumors.
Here are some of the myths around cryptocurrencies that some crypto holders believe to be true.
Bitcoin transactions are untraceable.
This is one of the most common myths about cryptocurrency transactions and blockchain in general. This is linked to the time when we understood that payment in cryptocurrencies were a boon for criminals.
It was also at this time that we saw the explosion in the use of bitcoin in the dark web in particular. Yes, Silk Road for those who don't know was one of the first marketplaces where you could buy and sell everything.
When I say everything, I'm not talking about Barbies or Pokémon cards, but rather drugs, guns or stolen bank cards. Yeah, not very glamorous, indeed.
Well, people were paying in Bitcoin because they (rightly) feared that cash transactions would be monitored by the FBI. They have often assumed, or even concluded, that Bitcoin is untraceable.
It's a myth. This is not true - although it takes considerable time - because we can trace the entire history of the blockchain. Moreover, the proof is that many people who operated on Silk Road were still arrested. Major drug dealers have fallen even while transacting in bitcoin.
Cryptocurrencies have no real value.
This is clearly the most widespread myth it seems to me. This is a preconceived idea that I think is shared by many detractors of cryptocurrencies. For many people (but this group is shrinking with each passing day), blockchain is just a science fiction technology with little impact for the real world. In fact, cryptocurrencies are for them a kind of virtual currency exclusively adapted and made for the virtual world.
Nothing more than a virtual Monopoly ticket. No attachment or connection with the everyday world.
This is certainly the easiest myth to contradict. You simply need to see the prices of cryptocurrencies to understand that cryptocurrencies have value. And, even greater value than traditional currencies.
Blockchain is a difficult technology to understand
While this may have been true in the past, a wide variety of different services have made it relatively easy to enter blockchain.
I think a lot of people are confused when it comes to defining blockchain when it's not more complicated than what people want us to believe.
At one point it was absolutely true, because it was new. It was frankly difficult to imagine a decentralized system. But, once you explain the concept well, it becomes tangible and understandable.
The time when blockchain was intended for an elite of geeks, nerds or other mathematicians is over.
In fact, you can even take online cryptocurrency courses that will make it relatively easy for you to master the basics.
Cryptocurrencies will change the way we use money
Well, this is only partially a myth. Blockchain can and will make many monetary transactions safer, faster and more secure. It can also change the way we pay, that’s obvious. In the distant future, it may also become the leading payment method. This means that when we want to pay for a service or an item, we may tend to do so spontaneously in cryptocurrencies.
However, this will not change any about how we use our money. People will still have wallets, use credit cards, and get by like they do now with traditional currency. This will change a lot of things, but not everything.
Cryptocurrencies are for criminals.
I admit, this is very close to one of the first myths about cryptocurrencies. This one, however, goes a little further.
This is a very common myth because in fact it contains a small grain of truth. Bitcoin and other cryptocurrencies got their best start on dark web sites such as Silk Road, as noted above, which primarily offered illegal products for sale.
However, times have changed and bitcoin has become popular. It's time to become more and more mainstream as evidenced by the project to create a cryptocurrency by Facebookk. More and more “legal” people who respect all laws are now using cryptocurrencies. It is no longer just the “new criminal currency” ideal for money laundering, it has become a financial asset in its own right. Microsoft, major banks and major investors are all now using cryptocurrencies in their investment portfolios.
So, it's time to get rid of this myth, don't you think?
Bitcoins and other cryptos are too volatile to really benefit from them.
If you invested in bitcoin at its peak (when it hit $20,000), I can completely understand why you might be disappointed. As I write this wonderful article, the price of bitcoin fell. Although there, around 10,000 dollars (it is August 11, 2019) the prices of bitcoins and other cryptocurrencies are rather increasing.
But, the fact that these same prices are extremely volatile, this gives the idea - and therefore, the myth - that these are the riskiest investments there are.
Let's not forget that with high risk, the gains are equally high. Those who capitalized and bet on the volatility of bitcoin came out ahead. This is why there are so many bitcoin millionaires and billionaires.
Of all the myths about cryptocurrencies, however, it is the one that opens the most debate.
Stores will never accept cryptocurrencies, so why have them
Not true. Simply wrong. Fortunately, this is one of the myths about cryptocurrencies that is tending to diminish.
First, there are prepaid bank cards that work with multiple accounts. You can have in your bank credit card such as that of CryptoPay, bitcoins, other cryptocurrencies and even euros or dollars (fiat currencies). This is already a giant step forward for paying in online stores and physical stores.
Likewise, more and more stores accept bitcoin payments. Renowned stores such as Etsy or Amazon accept bitcoin. We can also travel entirely by paying in bitcoin. Expedia and Shopify also accept them.
And that's just the beginning.
Cryptocurrencies are fundamentally different from traditional money.
In many ways this would have been true about 60 years ago. Today, since the digitalization of our currencies, this is frankly less the case. This is a myth about cryptocurrencies that could have been true.
But, once again, this is an outdated myth. Since the 40s (in 1944 to be exact) with the agreements of "Bretton Woods", the entire financial system experienced a paradigm shift and gold no longer supported the dollar. After that, other countries followed suit.
At present, the only real guarantee of value is the federal guarantee. In other words, the value of fiat currency is as arbitrary as the value of digital currencies. In addition, physical coins with bitcoin codes also exist (I will tell you about them in a future article). I'm not talking about decorative bitcoin pieces here, eh.
So now there is also some type of physical coin and some sort of cards containing bitcoins. And here I ask you: is there really a difference now?
You do not have to pay tax and the State does not tax you on your cryptocurrencies.
So this is a myth that was once true. Governments and many states around the world have legislated on bitcoin.
For most countries, bitcoin and cryptocurrencies are investments in their own right, just like investing in works of art, for example.
So, if you want to get rid of some myths about cryptocurrencies, this is perhaps the first one to destroy, especially if you are looking to invest in bitcoin.
If you're investing a lot, make sure you know your tax laws. A very useful little tip, I think.
Cryptocurrencies may be banned by the government.
Don't ask us how and why certain myths about cryptocurrencies and blockchain started. Honestly, we don't know how some people think this works but at first it scared a lot of people. Even more than people, it was especially governments who became afraid.
The first people concerned and terrified by the fundamentally anarchist idea of bitcoin were of course the banks. However, banks are the allies and pillars of governments.
So, this myth really has some truth, if you consider it carefully.
What is wrong, however, is to think that States can really have control over cryptocurrencies. In fact, it's technically impossible. Preventing bitcoin – especially at the stage it has reached today is frankly impossible to imagine.
States have absolutely no control over bitcoin and this is precisely why they are now trying by all means to legislate on its use. Simply so as not to lose control over something that is by definition "out of control".
So, even if states ban bitcoin or cryptocurrencies, it won’t change anything. It will be purely verbal in some ways. Residents of that state will still be able to use it personally.
In fact, the only way to shut down or ban bitcoin would be to ban or cut off all internet connections. Do you really think it's possible?
Conclusion: has the end of myths about cryptocurrencies already been announced?
So here are the myths about cryptocurrencies that we must try to correct. Some are very anchored in the collective imagination.
Some are already self-destructing, and that's already a good thing.
And, what is the myth about cryptocurrencies that you encounter the most? What do your friends or close circle tell you when you talk about cryptocurrency?
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Photo credit for the photo in this article: https://unsplash.com/photos/-r4n8oBR_-Y
