In this article, we will look at 14 myths about Bitcoin. Discover all the truths or lies about Bitcoin.
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14 Myths about Bitcoin
If you live on planet Earth, you may have heard of Bitcoin.
Since its inception, the digital currency has been taking up more and more space in the news and has become popular with investors.
However, how it works remains a mystery to some, and there are a number of myths about Bitcoin.
Lack of knowledge can alienate some people from this type of investment and even help spread information that does not correspond to the truth. Therefore, we have written this article in which we will reveal 14 myths about Bitcoin.
1. Bitcoin is dead
First of all, you may have seen headlines or even heard people say that Bitcoin is dead. Basically, when Bitcoin hits the news it’s repeatedly connected to some negativity, so Bitcoin became more famous for being a currency for criminals and things like that.
Bitcoin payments can be transferred around the world if you choose anonymity, so criminals still use Bitcoin, but they also use dollars, euros, pounds and all kinds of other money.
Unfortunately, Bitcoin has been introduced with a bad reputation in the past and seems to continue by media that love to create juicy headlines.
Another situation where people call Bitcoin dead is when it reaches a milestone in value. Bitcoin was dead when it reached $100 and then died again when it reached $200 and then died again when it reached $1,000 and then died again when it reached $10,000, but even in December 2017 when Bitcoin reached $20,000 in value, it died again.
There is a website that has a collection of all or at least most of the articles regarding the death of Bitcoin called 99 bitcoins, this site has a collection of all the news ads and stories where Bitcoin was mentioned as a dead coin.
The first time Bitcoin was dead was in December 2010, and since then Bitcoin has died over 300 times, although it still exists.
What we can learn from this is that the more often Bitcoin dies, the more it will make the news, so the more often people will hear about this false news.
This is a good thing because it also provides many opportunities for people to hear about Bitcoin so they can do more research and decide for themselves whether Bitcoin is really a dying cryptocurrency or not.
Imagine we hear in 2010 that Bitcoin is dead, but then you read another article a year later in 2011, where Bitcoin is dead again and hear this over and over again for almost ten years, so obviously something isn’t right.
By the end of 2017, Bitcoin has died about 200 times, which means Bitcoin was mentioned in the news at least twice a month.
But as of today, Bitcoin has managed to die more than 300 times, which means Bitcoin is appearing on the news at least 10 times a month, connected to some negativity.
So it looks like Bitcoin will continue to die over and over again, or at least in the news, but the fact is that Bitcoin is here to stay.
2. Bitcoin is a scam
Obviously Bitcoin is not a scam. But many people used to say that Bitcoin is a scam, although that’s not so much the case anymore.
What they should be aware of is the ICO, the initial offer of coins also called new and better crypt coins than Bitcoin. ICOS, are usually marketed with the sense that they will dominate the world better and faster than Bitcoin, but they are dangerous and almost 95% of all ICOS is actually a scam.
ICOS is also known as altcoins or alternative currencies, but the Bitcoin maximalists simply call them scam coins or scam tokens.
Most of them exist for only one purpose and that is to scam people and these are basically Bitcoin clones and there are many out there, so you really need to look at them and make sure you don’t have anything to do with any of them.
But to be fair, there are a handful of cryptosystems that are very good, but most of them have no use case, so basically not all ICOS are scams, just most of them.
Another question to mention is if you buy a Bitcoin from someone who scams you. That’s a different story and if it happens, the person is a con artist, yes, but Bitcoin is not a con.
It’s like when someone pays with a dollar bill in a store and the dollar bill is actually a counterfeit, so the dollar isn’t a scam, but the person who tries to use the counterfeit money is a scammer.
People who say that Bitcoin is a scam probably don’t know the meaning of a scam. What you should know is that there are Bitcoin-related scams on the Internet and scammers claim all sorts of things like doubling your money if you invest in bitcoins or make daily profits and things like that.
But let’s understand exactly what a scam is. First of all, a scam requires hidden information, but Bitcoin is an open-source protocol. Bitcoin is a very complex technology, but anyone can download and take a look at its code so there is no hidden information at all.
Bitcoin is using elliptic curve cryptography to engage in a discrete logging problem, it also uses the sha-256 hashing algorithm & ASCII encoding and many other technologies combined to be more secure.
The fact is that most people who say Bitcoin is a scam, don’t bother to learn about it, especially not bother to understand the technologies that were built on Bitcoin, but simply call it a scam.
3. Bitcoin is illegal
Unfortunately, one of the most widely held myths is that Bitcoin is illegal.
This is a myth that we ask you to help destroy as soon as possible from anyone who hears it, because it is totally false and because it also generates an initial rejection towards the use of cryptocurrency in general.
The truth is that there are still few countries that have pronounced themselves on Bitcoin, but of those that have done so, fortunately, none has declared it illegal.
But it is clear that at this point it is necessary to make a very important distinction, and that is that just as possessing units of any currency, for example, having ten thousand dollars or possessing one hundred thousand Argentine pesos is no crime but of course buying illegal items or services with these resources in any country if it is classified as a crime.
There is a difference between crypto-currencies not being illegal like any other currency and the fact that they can be used to acquire illegal goods and or services.
Because like any other means of payment, for example, Bitcoin cash and crypto coins, in general, can be used to acquire legal products and services, we actually see Bitcoin’s greatest potential to change the world as we know it.
But just like cash, bitcoin and other cryptocurrency units can be used to acquire illegal goods or services, if we can find someone to sell them and accept our Bitcoins.
But once again the fact here is that any currency in the world throughout history has been used to acquire illegal things.
Moreover, in some cases, these types of transactions are not even paid for with money, but rather with real estate or any other accepted means, because their main characteristic is that they are illegal transactions that are not regulated, and this leads us to the myth that we need to dispel, which refers to the fact that the only use of Bitcoin is to acquire illegal merchandise.
In fact, we dare to mention that there are even more legal items that can be purchased with Bitcoin and that it is easier to do so than to buy or acquire illegal goods.
4. Bitcoin is completely anonymous
Another very important myth that has haunted bitcoin from the beginning is that it is totally anonymous and although identity protection has always been an important part of cryptocurrencies, using them does not guarantee one hundred percent anonymity of the parties involved.
Think of a purchase you want to make of some legal item only you obviously want to spare yourself and the trade the high fees imposed on us by traditional institutions for the processing of our payment.
There are also people who want to simply send money to someone else such as a family member or friend who is in another state in another country or even nearby but wants to make this type of valuable delivery.
We could also think of someone who wants to make a donation and in these two cases, we would look to do so without being charged these high fees for processing our transfers.
In this second case, the donation can be clear a charity organization or could be some entity that we some non-governmental prevention and we want to do it again in the fastest and simplest way and without charging any high commission.
The important thing to note is that all transactions that we have mentioned, none of them is illegal, and moreover we could think that a person wants to acquire some good or service that is also not illegal but wants to be a league
straight from him to the purchase.
The point is that for all these people bitcoin is ideal and none of them are committing an illegal act and that first layer of some kind of anonymity that makes bitcoin possible is more than enough since by not committing illegal acts nobody is going to worry about tracking their origin in a sophisticated way and we can simply be satisfied with that extra privacy that Bitcoin offers.
5. Bitcoin is only for the Dark Web
There is another myth that dictates that only Bitcoin is useful for acquiring products and services from the part of the Internet known as the dark web and that it is a part that is plagued by markets for illegal goods.
This myth actually goes hand in hand with the previous one and with the first one so it is very important to dispel it so that the acceptance of bitcoin grows and therefore its use becomes more popular and its value increases.
The myth argues that bitcoin is of no interest to us and cannot be used by regular people to acquire legal goods and can only be used to acquire illegal products and services in the underground internet markets.
First of all, someone who has browsed this section of the Internet knows that it is necessary to take additional measures to be able to do so, such as using special browsers, like Tor, and other measures.
Also, take measures such as location and also identity as they may be exposed.
Therefore, even though there are people who know how to hide their identity 100%, some of them use cryptocurrencies as a means of payment in illegal markets.
What I can assure you is that this type of transaction is actually the minority of those carried out with bitcoin.
Therefore, this should only remain what it is, that is to say, a myth that we should always destroy whenever we talk to someone else in order to promote the acceptance of cryptocurrencies in general.
6. Governments can “turn off” the currency
There are countries that ban negotiations with bitcoins. This is the case, for example, with Bolivia, Afghanistan, Algeria, and Vietnam.
However, the list of countries in which cryptocurrency is legal is much longer.
The more advanced countries have developed regulations to deal with the currency, creating obligations, but freeing up its use in everyday life.
In addition, cryptocurrencies are not centralized and their operation is similar to the distribution of movies and music, which makes it technically difficult to deactivate Bitcoin.
7. Bitcoin is speculation
If you think that speculating means investing in something with the expectation that it will appreciate and then sell and pocket the profit, then, yes, Bitcoin is speculative.
But that can be adapted to almost any investment: gold, dollar, stocks, commodities.
For those who say that Bitcoin has no intrinsic value, the answer is the same: many other traditional and established investments don’t either.
What is the intrinsic value of gold? It’s only investor confidence that gives it value.
Furthermore, just like a precious metal, Bitcoin is also finite, as we know it will be limited to 21 million units.
No wonder cryptocurrency is called “digital gold.”
8. Bitcoin cannot be stolen
Another very important myth and one that we must be very careful not to believe is that bitcoin or for these defects, any cryptocurrency unit cannot be stolen.
In fact, in relation to this point, we usually handle two myths that are in fact opposites.
The first as we said is that they can never be for the bitcoin units we have and the other myth is that it is very easy for someone to steal them or even much easier than say traditional money and as we are mentioning both are just myths i.e. both statements are wrong.
Even more correct would be to say that cryptocurrency units are just as hard to steal as traditional coins.
In other words, imagine that we put thousands of bills in our living room and do not secure the door in any special way.
It may be that some days, perhaps some months, go by and no one steals them but somehow the rumor gets to a malicious person and that person realizes the amount of money and that we do not really lock our doors to the house, of course, it is very likely that we will be robbed of this money.
The same goes for Bitcoin. Security measures must be taken and it may be that never or many years will pass without a bitcoin unit being stolen and it may also be that a person will take many of the security measures available but for example, someone with malicious intent will find out and threaten you with a gun and simply force this person to break all the locks and steal everything in their bitcoin wallets.
That is why we mentioned that the possibility of theft by different means exists just as it does for traditional money but that is why the recommendation is exactly the same.
That is to say, we must always take the best possible security measures, because at the end of the day, as we have mentioned on this page many times, Bitcoin is indeed money and has a value in itself.
9. Bitcoin technology is not safe
Quite the contrary. Blockchain is the technology behind Bitcoin.
It is revolutionary and has been studied and applied in many other areas.
It can record several types of transactions and the records are distributed in several computers.
In digital currencies, this type of “general ledger” records the amounts that are sent and received.
Therefore, this information is stored in several different “libraries”, which makes it very difficult to delete.
As its name suggests, this system is made up of a chain of blocks.
Within each of these blocks, there is a set of transactions, protected by a strong encryption layer.
At the same time, the chain of blocks is public, so anyone can verify and audit the movements recorded in it.
Therefore, this technology can be secure and transparent.
This justifies, for example, the enormous interest that banks and other financial institutions have in blockchain and all the uses that are developed based on it.
10. Bitcoin is just another virtual currency
Another myth that we have discussed is that bitcoin and cryptocurrencies in general, are just another virtual currency or online point programs like those launched by some companies so that we can acquire their goods and products.
What we can reaffirm is that this is totally false for various reasons and that once again this is a myth that we must destroy in the first place.
There is a basic but very important point and it is that in the case of all these other virtual currencies transactions are given in which for example we acquired certain units of virtual currency with a charge to our credit card and immediately is reflected the balance in our account of the virtual store.
The key to understanding this is that when this happens our money has already been completely blocked from being spent on the online shop or services of the company to which we gave the authorization to charge our credit card.
To put it in simple terms if we buy for example an iTunes card and add it to our account we will have been charged to our credit card and we will have an increase in our balance that we have with the apple company account. But now we can never use that money to buy for example something that is only offered in the google play store.
Then the resources we put into this virtual currency are effectively imprisoned and limited to what is sold in that virtual store.
Cryptocurrencies, on the contrary, are a safe way to have resources online and be able to use them in different shops or even for transactions between individuals, without having any limit offering the same advantage that traditional money offers, in the sense that whoever receives the crypto-currency units does not necessarily have to like what is sold in the shop, for example, google play.
And he can spend it on anything else such as buying a computer from the DELL website or paying rent to the owner of a building where he lives and as the use of crypto-currency increases more and more this becomes a reality.
In fact, part of this myth is that crypto-currencies can only be used to buy goods either legal or illegal but through the internet in these virtual stores.
But of course, this is not true since in the first instance two people can exchange a good using bitcoin as a means of payment.
For example, two people meet and decide that the first person should send the second person a bitcoin in exchange for receiving the new television from this second person since he is selling it because he is going to change his residence to another state far away and he bought it before he knew he would be moving
This is in fact a transaction that is taking place totally outside of the Internet is a transaction that is taking place in the real world and would be an example of a transaction between individuals.
Another example of an offline purchase is if a person buys an item directly from a store and pays using Bitcoin.
Imagine that we go to a restaurant, consume and pay the bill using bitcoin. This would be an example of a transaction between an individual and a company or business.
In fact, the idea of the maximum potential of bitcoin is that any establishment will accept your currency and at the time we are still far from that ideal but we don’t consider it impossible for that to happen and many dare to comment that they see a long term future in which we no longer use traditional money.
11. I can’t buy anything with Bitcoin
As we said, Bitcoin is still new to the world. However, it quickly became popular, and unlike most people, you can use it to buy many things without having to convert virtual currency into cash.
Digital currency is already accepted in many stores and can be used to pay for many goods and services.
Here are some examples of what you can already buy with Bitcoins:
Buying a property.
Food in restaurants.
Veterinary practice expenses.
It is obvious that these are specific merchants that accept Bitcoin payments, but the variety shows that currency transactions are becoming faster and cheaper, which stimulates their popularity.
12. Bitcoin currency is a financial bubble
No, because that is illogical and, more importantly, prices are the least relevant or interesting part of Bitcoin.
To understand it better, let’s think of it this way. In the 2000s, 90% of all new internet companies collapsed, almost a trillion dollars worth was destroyed and that was the best year ever for the internet.
Why did this happen? Because that’s when the web really started to take off, its usefulness and adoption reached these tipping points with the real explosion in mobile devices, the beginning of smartphones and the mobile internet.
The web had finally taken over and there was serious business attention and the whole first generation of the internet exploded.
But what really happened is that in the last two years in that bubble, the internet took hold of everyone’s life.
The year 2000, was simultaneously the death and rebirth of the internet.
Bitcoin has gone through four bubbles like this, like the one in November 2013, where it went up to $1,000 and crashed to $230.
But what people don’t know is that that’s not the biggest bubble Bitcoin has ever had.
Two years before that, Bitcoin shot up to $30 and crashed at 25 cents and in relative terms that was a much bigger rise and much bigger fall and it took almost two years to recover from that.
That was his second-biggest bubble because a really big bubble was when he went from a thousandth of a cent to a dollar, which was the real birth of Bitcoin because parity was considered almost unattainable on the dollar by Bitcoin as a dream.
The idea that you can pluck a global currency out of thin air was itself a ridiculous idea. So, when you get to the dollar parity, you’ve shown that you can pluck a global currency out of thin air, and that’s never happened before.
We have at least three or four more bubbles. Because every time the attention changes, it blows another big increase, and because there isn’t enough to keep that increase, it will usually reverse and collapse again. This is a roller coaster.
Just like the internet was a big difference, the internet did not have a single stock price that everyone could pay attention to, so it is a blessing and a curse.
It’s a blessing because it’s an investment vehicle by attracting people to speculate on it, it generates a lot of attention when it goes up, it generates a lot of investment in Bitcoin companies and many of the early Bitcoin millionaires, reinvest their Bitcoin in startups, but at the same time it’s a double-edged sword because every time the price of Bitcoin starts to fall, someone writes an obituary for Bitcoin as “bitcoin is now dead”.
13. Bitcoin is a stock
Bitcoin is not a stock or stock. First of all, stocks are capital positions in companies, for example, Amazon or Facebook.
But when you own Bitcoins, you have a digital asset that is limited in its own circulation because of its controlled supply.
The possible misconception is understandable since Bitcoin has few similarities to stocks because there are many online exchanges where you can use Bitcoin for investment or trading purposes.
In terms of CMG and CBOE listing Bitcoin futures that don’t have much to do with Bitcoins, simply because you can bet on the future price of Bitcoin. But that’s called betting.
So, if you participate, you’re gambling and you can only make bets in fiduciary currencies like dollars, so you don’t need bitcoins.
Also, if you bet and win, you get paid in dollars and not Bitcoins. Therefore, you don’t have to buy Bitcoins when you participate.
14. Bitcoin is a pyramid scheme
Bitcoin is not a pyramid scheme. Let’s start by saying that Bitcoin does not have a pyramidal structure. The misconception is that it possibly comes from Bitcoin’s profits in terms of fiduciary value.
Bitcoin is continually increasing in value and comes from the limited supply of coins. Basically, the more people buy the coins, the more valuable they become because the supply is scarce.
But the pyramid scheme pays dividends or fees to entice more people to join, but Bitcoin as an investment doesn’t pay dividends, the return comes from your capital gain.
The pyramid scheme has no real commercial value, whereas you can buy goods or services with Bitcoins.
A pyramid scheme is a centralized system where scammers handle payments and pay dividends.
Also in the typical pyramid scheme, con artists can collapse the scheme at any time by running off with the money.
On the other hand, Bitcoin is a decentralized system and the inventor and first users of Bitcoin cannot collapse the system, even if they want to.
published Bitcoin software, but 80% of the legacy code has been rewritten and modified by hundreds of Bitcoin developers.
So once again, Bitcoin is not a pyramid scheme.