Top Cryptocurrency Myths

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The year 2009 was especially memorable for mankind when the term cryptocurrency was used for the first time, and Bitcoin was born. Most people at that time did not pay much attention to this project, considering it something unserious and potentially free. Today, the regular use of cryptocurrency by people has proven that it is a useful technology. However, to this day there are still many skeptics who have a negative attitude towards digital money.

Such people often say that cryptocurrency is not a reliable thing and users should not invest in it. Is this true or just a loud myth? This article collects the top ten untrue rumors and myths that are said about cryptocurrency.

Myth 1. Cryptocurrencies have no real value

The first discussion focuses on the fact that digital currencies have no real value, as their worth is determined by their ability to be used as a medium of exchange in a virtual economy. Another criticism is that cryptocurrencies have value but contain no physical form of back up which is true since cryptocurrencies are virtual.

Nevertheless, most modern fiat currencies do not have the backing of gold, silver, or any other physical commodity and are valuable based on demand and scarcity. Like gold, cryptocurrencies have their intrinsic value in the same way that the dollar, Euro, British pound or any other legal tender has its value: it is because people have a belief in its value.

Cryptocurrencies are also considered to have value in use. They facilitate quick, cheap, cross-border transfers of funds with no need for the services of a middleman. In terms of usage and adoption, the more users and businesses begin to adapt to the use of cryptocurrencies, the greater the benefit that the crypto network will generate.

Myth 2. Storing cryptocurrency in a wallet is not protected by any means

A lot of people agree that holding coins in a digital wallet is dangerous because wallets have been attacked before. However, such a perception of organizations is outmoded. Today, there are some well-known hardware wallets and they already have implemented the features that can be referred to as advanced. For example, two-factor authentication and cold storage, which means that the funds are stored in encrypted offline devices.

Incorporating practices such as avoiding sharing your passwords and using good quality passwords, as well as purchasing from reputable manufacturers, showcases that digital wallets are safe ways to store cryptocurrencies. All the biggest wallet risks of today are exclusive of ineffective technology. They are the direct result of user negligence.

Myth 3. Cryptocurrency usage is associated with crime and fraudulent activity

Critics also point out that the use of cryptocurrencies is pseudonymous and suggests that it fuels crime. This is perhaps the most important myth that millions of people around the world have heard about. However, due to their openness, blockchains render Cryptocurrencies useless for criminal activities. Cash and precious metals still retain much lower level of identification.

The largest exchanges conduct KYC policies and have internal fraud detection mechanisms through data analysis. But while the volumes of illicit transactions remain small compared to overall cryptocurrencies’ turnover. Paper money is still dominant in illicit transactions because it is almost completely non-reportable. Recent studies well demonstrate that cryptocurrency transactions that are associated with fraud and criminality are around 0.15%. This is quite a low figure.

Myth 4. People should invest only in Bitcoin

Any user on the internet who has heard of cryptocurrency knows about Bitcoin. This is not surprising, as Bitcoin was the first digital currency in the world. There is a notion out there that Bitcoin is the only sustainable investment in the cryptocurrency market. However, it is an undeniable truth that Bitcoin itself is the largest cryptocurrency by market capitalization, and its popularity is dominating the headlines and discussions. It is now up to 9000+ cryptocurrencies nowadays and many of them have unique features or are designed specifically for different use cases than Bitcoin.

For instance, Ethereum serves as a decentralized app and smart contract platform, Ripple is designed to enable global money transfers between banks, and Monero is all about maximal privacy. Some of them have even achieved much higher percentage gains in price during the latest bull markets than Bitcoin. Diversification of investment across different cryptocurrencies will increase yields and also help in diversifying risks over the various cryptocurrencies rather than staking all funds in Bitcoin.

There are many shining examples of digital currencies that have managed to grow by more than 15 thousand percent in a few years. They have helped many investors become dollar millionaires. Just remember about such projects as Solana, Shiba Inu and Dogecoin. They managed to grow by thousands of percent talking about the market value. Moreover, many digital currencies continue to grow today, and economic experts predict the huge potential for investment.

Myth 5. Any digital currency is a bubble

Critics have gone further to saying that the rapid growth and flapping that has characterized the prices of the digital currency over the last decade suggests that the market is in a bubble. Nonetheless, critics of cryptocurrency have said it was a bubble when Bitcoin was at a $100, $1,000, and $10,000 mark. However, it is crucial to understand that cryptocurrencies’ market instability is primarily attributed to the enormous first-year gains and relatively immature ecosystem.

Cryptocurrencies have value as they represent digital money that exists outside of central banks and operate as a decentralized digital system while being underpinned by the use of blockchain. However, it is expected that prices will stabilize in the future, as the underlying structures are put in place and more people begin to embrace it. Also, with many big corporations having adopted the digital asset, having it on their books as an asset shows increased acceptance.

Myth 6. Digital money will replace fiat money in a few years

Some supporters of cryptocurrencies believe that cryptocurrencies will quickly bring revolutions to digital fiat currencies, including the US dollar and the financial system. Yet, paradigm shifts of such a scale in the entirety of financial systems are not outcomes of one day’s work.

Although such conditions as hyperinflation can spur the development of cryptocurrencies in some countries and their transition from using some world currencies, such as the USD, moving from using centralized systems to decentralized ones on a global scale will still require many years. You should realize that paper money is a thing that has been around for more than one thousand years. They have come a long way to become an integral part of every person’s life. Moreover, today, a large number of skeptics remain, who do not believe in the success of cryptocurrency and consider it an unsafe way of payment. Yeah, experts say that cryptocurrency will be able to replace fiat money in the future. However, there are two factors to consider in this situation:

• Time. No one can know when the use of cryptocurrency will become more common than paying with paper money. It could take 5 years, 10 years or maybe even 50 years.
  
• Scale. Economic experts are confident that cryptocurrency will replace fiat money. However, they don’t know if they will completely displace paper money or partially do it.

Looking deeper into this myth, it is possible to realize that the means of payment and exchange have been changing throughout the existence of mankind, and this is quite a normal thing. For example, until paper money appeared, people paid for services or goods with wheat, gold, water or other things that have value in society.

Myth 7. Cryptocurrency is a temporary thing

On forums about cryptocurrency today, you can often find opinions that the trend for cryptocurrency will soon end and asset values will drop significantly. Some people think that cryptocurrency is a kind of fashion that everyone will forget in a few years. 

Right now, only a limited number of people are using electronic money and some estimates are around 150 million people. However, this market is a system that is constantly growing and is gradually entering everyone’s daily financial life. Now, thanks to Bitcoin and other cryptocurrencies, it is possible to:

• Pay for goods in the online store.
  
• Make donations to charitable organizations.
  
• Pay for media subscriptions.
  
• Use services of insurance companies.
  
• Buy real estate.
  
• And perform many other tasks.

To confirm the dispelling of this myth, remember things like the internet, email and social media. When these projects were introduced, people also thought that it was not serious and had no future. However, today they are integral things in the life of any modern person on our planet.

Myth 8. Mining cryptocurrency is bad for nature

Another myth that is so recurrent is that crypt mining is hazardous to the environment. Critics say it discharges more power acquired from fossil energy sources than what it saves from compact fluorescent lamps. Although mining does demand substantial computational processing, most of the leaders of the crypto environment have addressed pertinent sustainability issues.

First of all, it is important to note that nowadays, a large number of miners utilize power from renewable sources of energy such as solar, wind, and water. According to a study by the University of Cambridge in 2021, about 76% of miners reported to be using renewable energy sources to power their operations. Other form of validations such as proof-of-stake validation also cuts the energy consumption bills as compared to proof-of-work systems. That is why major networks like Ethereum shift to proof-of-stake.

Cryptocurrency must scale sustainably, and this can only be done through the stewardship of competent leadership and the application of technology. The thrust that holds crypto as being inherently negative on the environment is invalid.

Myth 9. It is difficult for beginners to understand how to buy cryptocurrency

As statistics show, there are many people around the world who would like to invest in cryptocurrency but are afraid to start because they don’t know how to do it. Based on this, another myth has emerged which is called «cryptocurrency is difficult».

It goes without saying that cryptocurrency is a relatively new phenomenon that requires a special approach and increased knowledge. However, if you just want to purchase a certain amount of coins, using them as savings, it is very easy to do even for a beginner. With the Swapzone crypto exchange, any user can quickly create an account, purchase the desired cryptocurrency with fiat money, and exchange digital assets with each other. Even a new user who doesn’t know much about cryptocurrency can easily handle the task of opening an online wallet and buying digital coins. Many of the exchanges have also launched features such as auto purchasing, which makes it very easy to practice the dollar cost averaging technique regularly.

Myth 10. Cryptocurrencies are too expensive

In today’s market, there are many cryptocurrencies whose value starts from 100 dollars and higher. For example, the most expensive cryptocurrency is Bitcoin, which is valued on exchanges today at around 61 thousand dollars. However, there are many other alternatives that can be easily purchased. Moreover, buying cheap digital currencies today is a great opportunity to invest money profitably. Cheap cryptocurrencies usually have great potential in the near future. 

Final Thoughts

As you might have realized by now, there are many myths surrounding cryptocurrencies today. However, the reality is just one. The future of the world is directly related to blockchain technology and cryptocurrencies. This process cannot be stopped. It is natural and meets the modern challenges and requirements of the time. Cryptocurrency has already irrevocably changed the financial system, and the blockchain community is shaping a new future. Bitcoin and other altcoins are the new gold. Those persons who understand these principles now will be far ahead of others tomorrow.