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Myths about Bitcoins

Bitcoin as a concept is not really easy to grasp in its entirety simply because of the fact that it actually entails myriad areas of study including economics, cryptography and computer science. This remains one of the primary reasons why the concept as a whole has continued to confound users irrespective of its popularity. Today, we are going to address a few misconceptions associated with bitcoin trading — by discussing and eventually debunking them. This one is for every one looking to make a foray in the world of cryptocurrencies and the ones who are already a part of it. So read on in order to unravel!

Quite unfortunately, for everyone who is not into bitcoin trading, the practice itself is questionable. Assumptions run wild. While some believe that bitcoins are actually dead, there are others who opine (erroneously, of course) that this form of currency trading gives rise to criminal activities. None of these assumptions — let us tell you- is true. Let us elaborate in the following segments.

Myth #1: Bitcoins do not exist anymore

Read up the “real” reports and you will actually know what the truth is. From being touted as one of the most “affluent” currencies to inspiring the “what next?” hopes—Bitcoin is nowhere near “death”. However, there are dedicated websites that will try to make you believe otherwise. You might as well come across sites that are solely designed to bring declarations regarding the currency’s death from 2010 to the fore. 2017, however, has already been touted as one of the most successful points in bitcoin’s history when it comes to the number of transactions being conducted on the network each day. So, there is actually no point in embracing myths just by looking at one or two websites.

Myth #2: Since bitcoin is not governed by established authorities it is actually larcenous

Bitcoins are not used by criminals. Cryptocurrency essentially DOES NOT give rise to criminal activities. Blame it on the television shows, primarily, bitcoins largely have come to be associated with criminal activities. Most of them show this form of currency being used by characters with questionable background – i.e. terrorists and criminals. Let us tell you that there has been no major evidence supporting the belief. There was an Europol investigation which clearly stated that reports of bitcoins being used for terrorist activities have not been confirmed. In fact, it has been maintained that the privacy issues attached to digital currency continue to make it a risky proposition for mischief-makers. In fact, it’s still cash which continues to rule illegal transactions.

Let us read on to unravel why Bitcoin is not a Ponzi Scheme. It’s in fact scary to know that even some of the eminent financial authors are calling it a Ponzi or pyramid scheme. We will explain why it’s not so!
Ponzi schemes are never backed by the kind of transparency that bitcoins are backed by. Ones who unwittingly become a part of Ponzi schemes never get to know who exactly is at the helm of things. Normally, these schemes are just run by one person. Bitcoins function quite differently. It is decentralized. It is NOT controlled by a single entity. It’s more like the Internet—though we know that Sathoshi Nakamato invented it – we do not know who he actually is. Still we do not regard the internet as a Ponzi Scheme. Bitcoins work in a similar fashion.

Another very important thing to note is that Ponzi schemes are mostly selling education materials that are as good as “nothing”. As most of the prudent articles on the internet will point out – the Ponzi schemes are basically selling you nothing but “air”. With bitcoins- however- there is no such scope. You are getting bitcoins when you’re buying bitcoins. There are multiple users that can actually use this digital currency. Ponzi schemes generally look to pay their previous investors through their new ones. You may be required to escape these schemes in a rush if you are unable to pay the promised rewards when no more members are signing up. With bitcoins however you have no such concerns.

Myth #3: Bitcoin is everything “bad” and worthless

The absence of an established authority at the helm of things has actually led to a series of misconceptions. Backing this digital currency is a company or an organization which guarantees profits to investors. There is no authoritative body promising success as far as the peer-to-peer transactions are concerned and this is the reason why some even believe that digital currencies make for nothing but for pyramid schemes. Once again, there are no reports whatsoever confirming these claims.

There is also no room to believe arbitrarily that bitcoins are worthless or that they have no value just because they are sanctioned by an organization and not by a government body. However, Jim Rickards, the author of Currency Wars has very wisely pointed out that bitcoins – if not backed by a governing body- are eventually supported by consensus just as gold is.

Moreover, if these coins were worthless, they wouldn’t really have been accepted by the biggest of companies like Microsoft, Expedia, Overstock and Shopify among others on a regular basis. This is proof enough that bitcoins are not worthless and that they are legitimate. What more? Bitcoins have received official recognition in Japan as well. It has been officially announced that people will be able to pay for goods and services through bitcoins. It is now a legal method of payment in the country. The Financial Services Agency now has got strict capital requirements, operation stipulations and cybersecurity policies in place to control bitcoin trades. Already 11 bitcoin exchanges have been issued operating license in the country.

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