Cryptocurrency has recently swept the world. Many people are looking deeper and deeper into the idea of digital assets, the crypto market and alternative currencies. More and more young people are losing faith in traditional investment methods, and investing in cryptocurrency.
And it isn’t just gen z or millennials who are exploring crypto. Estimates show that the number of American adults who have invested in crypto has been steadily on the rise, with many predicting that the number is only going to increase in the future.
Of course as with any new, and popular idea, potential investors and analysts have been asking questions. Even with the rise in popularity, many myths and lies surrounding cryptocurrencies still persist. In this article we look to debunk some of these untruths and clarify just what cryptocurrency is, and how it is used.
“You Can’t Make Money Off of Cryptocurrency”
The number one most popular myth, is also the most easily debunked. One only needs to look at the number of people whose lives have been completely changed by investing in cryptocurrency. Regular, everyday people who made small investments in Bitcoin years ago, are now millionaires. A huge percentage of the American adult population has proudly admitted to investing in, and heavily profiting off of Bitcoin.
Several celebrities, who’ve invested in cryptocurrency, or accepted crypto-based payments for their product have made insane profits. Rapper and actor, 50 Cent made millions when he decided to accept Bitcoin payments for his album “Animal Ambition”. Mike Tyson, the famous professional boxer, and former heavy-weight champion, has said he invests in Bitcoin, and even started his own digital wallet.
And if that isn’t enough proof, take a look at the number of crypto trading site user reviews, who praise the sites practices, and say that since they’ve started using the websites or apps they have seen a major increase in profit from crypto trading. Websites/apps like https://tradingplatforms.com/etoro-review/ provide a user-friendly interface, and thanks to the use of artificial intelligence technology they can maximize the profits of their user base, by predicting the market’s volatility.
“Cryptocurrencies Have No Value”
Cryptocurrencies, which can be acquired via mobile or desktop devices, are difficult to categorize, and even the IRS have had a hard time of classifying digital assets when it comes to taxes. Investors through the years have been confused as to how they can use their digital assets and how to file their Bitcoin profits when it comes to taxes. These kinds of confusions have led some to claim that cryptocurrency is a passing fad.
These kinds of accusations couldn’t be more wrong, as not only has the popularity and prominence of cryptocurrencies increased in the past decade, but cryptocurrencies, much like fiat currencies, can be exchanged for the exact same goods and services.
That aside, it has been shown that Bitcoin has intrinsic value based on the cost of producing. Most cryptocurrencies are produced through a process called crypto mining, which involves the consumption of electricity, which of course has a cost. Bitcoin’s market value tends to correspond to this cost, increasing as the network grows.
“Cryptocurrency is Used for Illegal Activity”
One of the oldest, and most pervasive myths about cryptocurrency is that its primary use happens on the black market. While, yes it is true that the anonymity which cryptocurrency provides may be enticing to criminals, it is also important to note two things. One, while the transactions are illegal, the cryptocurrencies themselves are not.
Number two, black markets have existed way before cryptocurrency, and have used fiat currencies for the duration of their existence. In fact, it has been shown that most black markets operate using fiat currency, rather than cryptocurrency.
Most cryptocurrency users and investors use their assets to purchase regular, everyday items, and in fact, the first ever transaction where Bitcoins were used was to purchase two pizzas from the popular pizza chain Papa John’s in 2010.
“Cryptocurrencies Aren’t Safe”
Those familiar with cryptocurrency might know that the principle behind the digital asset is the blockchain technology which powers it. We won’t delve too deep into the technology used behind blockchains, but needless to say, it is very difficult to break. As new transactions are loaded up on the blockchain, the previous transactions are recorded into new blocks, and then encrypted. This makes cryptocurrencies rather safe in terms of “stealing”.
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However, it is worth noting that buyers and sellers of crypto ought to take measures in protecting their data, once they are actually in possession of it. While blockchains are hard to crack, e-wallets, or hard drives where cryptocurrency is stored once purchased can be hacked or tampered with. So, when purchasing cryptocurrency, make sure to do everything in your power to protect yourself from people who may want to tamper with your asset.
Hello, My name is Shari & I am a writer for the ‘Outlook AppIns’ blog. I’m a CSIT graduate & I’ve been working in the IT industry for 3 years.