4 Common Myths About Bitcoin and Alternative Cryptocurrencies

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Cryptocurrencies and bitcoin as their most popular and valuable example have been around for well over a decade. When they were first introduced, almost nobody knew enough about them to jump on board and invest. As times went by and as the hype grew on a monthly basis, common folk started to educate themselves about it.

Fast forward some 13 years later and the masses know a lot about the general principle behind virtual currencies, the blockchain technology they rely on to operate, mining, trading, exchanges, etc. The collective consciousness is far richer than it was for the first few years. However, there are things that have barely changed from those days. Some things remained unchanged and many still believe in them, which automatically classify them as myths.

There are plenty of myths surrounding bitcoin and other, alternative cryptocurrencies that have stood the test of time. After all, that is how the most popular myths survive for centuries or even millenniums. The biggest of all are obviously made up and historically inaccurate, but they make for great stories and as such become legends. For something as recent as crypto, something that remains relevant and is only getting bigger, there is no room for myths that would sway away potential investors or give false hope to those who heard them.

Therefore, for these and many other reasons, we decided to talk about the most common myths about bitcoin and alternative cryptos. Join as we debunk or confirm these stories and reveal the bigger stories behind them. If you are interested in all things Bitcoin and crypto and need a great place to trade, make sure to check out Bitcoin X APP.

1. Virtual Currencies Are Used Exclusively for Illegal Activities

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This is an old one, as old as cryptos themselves. People tend to fear what they do not understand and it is easier to attribute a certain bad quality to something new and different that to try and learn what it really is. This is how the myth of digital currencies only being used for illegal activities that could get you in trouble with the law. Only those with nefarious goals and criminals who are part of large-scale operations use digital currencies.

You have probably heard something along these lines. Well, couldn’t it be said that the same can be said for any other type of currency that appeared? Don’t criminals already use regular, traditional money in their illicit activities? This myth has no basis in reality because less than 0.40% of all crypto transactions were related to a type of illegal activity in 2020, according to Chainalysis.

This company investigates crimes related to virtual currencies and blockchain, and their data is accurate. Out of that small number, almost 55% were crypto scams, which is a type of illegal practice that exists in all sorts of other mediums too.

2. Cryptocurrency Does Not Have Real Value

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Another myth that began spreading almost as soon as bitcoin and the other few initial cryptos appeared on the market was the belief that they have no real-life value. How can something digital possess any value and be exchanged for goods or services? Who would be crazy enough to pay thousands of dollars for something they cannot physically touch?

The truth is that value is quite a subjective concept. Every person, society, or community may place value on something differently than their peers. Someone may be willing to pay millions for an art piece that somebody else would not think twice about throwing away with the trash. As you already know, crypto does have value and it is actually one of the most valuable assets you can possess at the moment.

It can be exchanged for traditional money, you can pay for products and services with it, and it is in high demand across the world. A whole industry exists behind it as well as a market where it can be sold, bought, or traded for and among itself. All of these things are one large proof that crypto does have real value like anything else in the world.

3. Mining Creates New Cryptocurrency Tokens

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Contrary to popular belief, i.e. the myth, cryptocurrencies are not created through the process of mining. The miners who use high-end computers to do this do not make new crypto. Mining is actually the process during which transactions are validated and new blocks in the blockchain are created. The crypto the miners get is simply the reward for opening a new block on the blockchain.

In the beginning of the industry, people thought that miners are the ones who do something with their hardware and software and literally find new crypto, just like a traditional miner would find gold. It is more complex than that and not as black and white.

The myth surrounding mining has been debunked many times and most people nowadays understand the premise behind it. This validation of transactions and the creation of new blocks takes a lot of time because it involves working out complex mathematical problems, something that requires a lot of computational power.

The stronger the machines doing it, the faster it is done. Miners invest a lot of money in high-end PC specs to create these rigs and reap the rewards, which is the crypto they receive in return.

4. Cryptos Will Replace Traditional Money

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Traditional money is also referred to as fiat currencies, and it a popular belief that cryptos will one day completely replace them. Still relatively new in comparison to the millennia of traditional money, cryptos can never truly replace regular money. In order for that to happen, everyone would have to adopt them and stop using regular money. Governments and central banks would have to make the switch too and the whole of society would have to agree on it. A lot more people would have to invest in them, merchants would have to post prices in cryptocurrency instead of dollars, euros, and other traditional money, and a trend would have to be established.

The established system has deep roots in society and those in charge of it will never want to let go off it. They control too much, and since blockchain is decentralized and no single body controls it, they would never be willing to adopt it. Taxes would cease to exist, government would no longer be able to sponsor programs and services, and inflation would be under control. Every single policy related to economy and banking would have to be changed.