Top 3 Myths About Bitcoin
The ever-increasing popularity of Bitcoin as a digital currency and alternative form of payment for merchants has brought an huge increase in the number of new users.
But with so much negative media coverage, it’s easy to get carried away from its real intrinsic innovative value.
So here are the top 3 myths that you should know about Bitcoin.
Myth 1 – Bitcoins don’t have real value
It’s true that many cryptocurrencies are valued largely through speculation.
Factors driving speculation value (TICOS):
- Technology the currency is based on
- Ideology behind its creation
- Credibility of development teams
- Overall mission of the currency
- Scale of solutions it offers
However, when it comes to Bitcoin, the currency holds both – measurable and speculated – value.
Millions of people around the world use bitcoins for it’s ability to send or receive money cheaply. There’s a fixed supply – 21 million coins – and a constant demand for the currency. Hence, there is ‘real’ value in it.
Myth 2 – Bitcoin transactions are completely anonymous
Contrary to what you may read in the mainstream media, the currency is in fact NOT completely anonymous.
Although it’s true that it is hard to identify someone’s real identity through tracking bitcoin transactions, it is still possible. All Bitcoin transactions are recorded publicly on the blockchain and it is possible that authorities could uncover the person’s identity through a subpoena.
Hence, it is most safe to say that Bitcoin transactions are pseudonymous.
*Tip: Anonymity may be improved by using Bitcoin addresses only once and/or tumbling coins through a coin-mixing service.
Myth 3 – Only criminals use Bitcoin
It’s true that Bitcoin has been used for various criminal activities and as such, it has attracted a lot of negative media coverage.
With high-profile cases such as Silk Road and BTC-e money laundering scandals, Bitcoin has often attracted more negative press than positive.
However, the statement “Bitcoin is only used by criminals” is just not true.
Bitcoin’s ecosystem is growing rapidly with many legitimate businesses accepting the currency. It can even be used offline through dedicated credit/debit cards and the currency’s market cap recently hit $70 billion USD (late-August, 2017). The point to note is that cash, when used directly – without any banks or financial services involved – is in fact, more anonymous and untraceable that compared to bitcoins.