Cryptocurrency is a relatively new concept. Bitcoin is known to be the first-ever cryptocurrency. Satoshi Nakamoto invented it in 2009 as the world’s first virtual asset. The cryptocurrency received a lukewarm response in its initial years as financial experts were skeptical about its survival in a market where fiat currency has been the only accepted currency for all types of financial transactions.
There’s no denying that the crypto market has been on a roller coaster ride these past few years, with massive increases in prices and lots of volatility along the way. As interest grows, more and more people want to invest in digital currencies, but some misconceptions about them still prevail among the general public.
The novelty of the cryptocurrency concept and the many aspects of cryptocurrency that people did not understand resulted in the emergence of several myths associated with it. In this informative article, we want to debunk five of the most popular myths about cryptocurrencies. Read on to know more in detail!
- Cryptocurrencies are used for Illegal activities
Cryptocurrencies are used only for criminal activities is the most common myth about Bitcoin. It is true that in the initial years, Bitcoin was used for nefarious activities but today the number of transactions that can be linked to illegal activities is almost negligible.
As of now, 2%-5% of the total GDP is used for criminal activities in which crypto usage is a minuscule 0.3%. With new laws and guidelines being put in place for the safety of the traders and users, using cryptocurrency as a means to conduct illegal businesses is getting tougher with each passing day.
Today, the illegal activities seen in cryptocurrency are the same or maybe less than in the traditional financial markets. This is so because the regulatory norms that apply to financial institutions now apply to digital companies as well. Also, to ensure that all standards are strictly adhered to, these companies are regularly audited by independent auditing agencies and regulators.
- Cryptocurrency does not have any value
It is said that fiat currency has value while Bitcoin does not. The limit of Bitcoin has been capped at 21 million and this limit itself gives it a value. Due to the scarcity in supply, the demand in the cryptocurrency market has ensured that it has value.
Also, the fact that millions of people have invested in an asset even after being aware that it exists in a completely virtual space is proof in itself that cryptocurrency has value. The miners and the traders who are the two main components of the Bitcoin ecosystem decide its value based on the principle of demand and supply.
- Cryptocurrency is a complex concept
The process of how miners solve complex mathematical puzzles to create a new Bitcoin and how the decentralized blockchain functions may be difficult to comprehend for many. The trading aspect requires you to understand how and why the Bitcoin value fluctuates and when is the best time to strike a deal.
With the tremendous increase of potential traders willing to invest in cryptocurrency, there has been an influx of several crypto trading apps that have come to the rescue of the traders. However, not all apps are trustworthy. One app that has created a niche for itself and has gained popularity among traders is bitprime-gold.co.
- Cryptocurrency has no future at all
Seeing the extreme volatility in the Bitcoin value, many believe that it is going to fizzle out very soon, in short, it is a bubble waiting to pop. In financial terminology, a bubble occurs when the price of a commodity rises much beyond its fundamental value and is not fit to be invested in any longer.
The Bitcoin price has surged hugely at times but it has regularized each time and survived. The volatility has been attributed to the fact that it is a new asset and with time it will become more stable.
As with all new concepts that are created as an alternative to established institutions, Bitcoin, too, has had its share of cynics and skeptics. It is time now for the myths associated with Bitcoin to be put to rest.