Bitcoin has become one of the hottest commodities the world has ever seen, and as a result there have been several untruths created by both uneducated and well-meaning people regarding the digital asset.
Here are 5 Bitcoin myths and the real facts behind them.
Bitcoin Will Take Over Cash
Cryptocurrency enthusiasts often gush about how Bitcoin will be the ‘future of currency’, even going so far as claiming that it will replace cash and other traditional payment methods such as credit cards down the line.
There’s a bit of truth here, largely due to the movement of cashless apps such as Apple Pay and Google Pay, among others. However, these platforms are in harmony with traditional fiat as users will still need to supplement or load it up with cash or credit.
Bitcoin is Above Regulations
Bitcoin was once used in the dark web to obtain black market products and items. This is probably how it got the bad rap from major financial institutions and pundits.
This myth is more of an evolution than an outright myth. Yes, it’s true that Bitcoin was unregulated before, but now several states in the US now have laws in place regarding Bitcoin and cryptocurrency in general.
Bitcoin exchanges now have ‘know your customer’ laws to stop money laundering through cryptocurrency, and the IRS has put Bitcoin under taxable commodity.
Bitcoin Transactions are 100% Anonymous
While Bitcoin does offer a degree of anonymity when exchanged on the internet compared to other payment methods, it’s not completely track-proof.
Bitcoin transactions are not recorded in real-world identities as the blockchain mainly uses pseudonyms. Every time a user makes a transaction the network generates a new pseudonym.
The truth is that it’s possible to track a transaction to a person, mainly by studying the pattern and looking for the paper trail as the crypto is turned into fiat currency and physical goods.
You can be as convoluted in covering your tracks but in the end that could prove to be too much trouble for the average user.
Bitcoin Supply is Limited
Bitcoin has been hailed as the digital gold since there’s only a finite amount in circulation. Originally, the coin’s creator intended for the supply to top out at 21 million, and some experts back the claim and say that it can’t be debased because it’s virtually impossible to increase the cap.
Bitcoin traders turn to bitcoin lifestyle to generate profit and take advantage of the finite supply and volatility. Technology could change in the future, or the blockchain could be altered by the community via an update that could lead to the supply expanding.
Any Bitcoin Exchange Will Do
No cryptocurrency exchange is the same, with some being better than others. For beginner investors and traders it’s a good idea to check out bitcoin trader review to see if it’s a good match for them.
Generally speaking, good exchanges are ones that have immense volume and have a large user base. It has to have excellent security measures to deter hackers and theft.