As with any other fringe product or service, there are many myths surrounding cryptocurrencies. Cryptocurrencies aren’t just for computer geeks and drug dealers trying to avoid the government. Relieving yourself of these myths will permit the formulation of a more accurate opinion. It’s easier to make informed decisions when your knowledge is sound. Myths regarding cryptocurrencies abound:
1. Cryptocurrency is illegal. It depends on the country. It’s legal in Canada and the United States, but there are other countries, such as Russia, that have deemed it illegal. It’s unlikely the legal status will change anytime soon in the United States. It’s possible that it will become regulated, however.
2. Bitcoin is the only relevant cryptocurrency. There are several other cryptocurrencies. All have their strengths and weaknesses. Bitcoin, released in 2009, is the oldest and most well-known of them. Most of the other cryptocurrencies are less than three years old:
• There are several others.
3. Only criminals have a use for cryptocurrencies. While cryptocurrencies continue to be used for illegal activity, cash is still king for illegal transactions. There are reputable retailers that accept cryptocurrencies, including Microsoft and Dell.
4. I can get rich with cryptocurrency. The potential for profits does exist. People have gotten wealthy through increases in the value of cryptocurrencies. However, just as many people have lost a tremendous amount of money, too. It might happen, but you’re unlikely to retire on your cryptocurrency purchases.
5. Cryptocurrencies are fiat currencies. Most of them are. That’s true. But so are the Euro, Canadian Dollar and the US Dollar. All major world currencies have abandoned a gold standard. Both Canada and the US decoupled the value of gold and their respective dollars in 1933. The value of all fiat currency is based on the willingness of the public to agree that it possesses value.
6. The government can shutdown cryptocurrencies. The government could make cryptocurrencies illegal, but shutting down the system would be next to impossible. There’s no central server or location that houses a cryptocurrency system. The information is stored on the computers of every user.
• Unless the government can find a way to shut down the internet, it would be challenging to put an end to cryptocurrencies.
7. It’s easy to mine cryptocurrencies and make money. Entire companies have been built for the sole purpose of mining cryptocurrencies. It requires a tremendous amount of computer hardware and electricity to be successful. Unless you have several hundreds of thousands of dollars, you can’t even begin to compete.
8. Cryptocurrencies are subject to hacking. Bitcoin merchants and wallets have been subject to hacking activities. However, Bitcoin itself has never been hacked. Other cryptocurrencies have similar security profiles. Insufficient security is always a potential problem with cryptocurrencies and cash. Protect your wallet and you should be fine.
9. It’s impossible to trace cryptocurrency transactions. It’s not easy, but it can be done. Regarding Bitcoin, the blockchain ledger lists all the transactions that have ever occurred with Bitcoins. The challenging part is linking the wallet address with the owner.
• With enough time and effort, the government can eventually track you down. The government has seized and auctioned off millions of dollars’ worth of Bitcoins.
Have you been guilty of believing these myths? It’s easy to be led astray. Cryptocurrencies still aren’t very common, and myths are easily formed and spread. Become more knowledgeable about cryptocurrencies. They might just be the wave of the future. They’re certainly becoming more popular each year.
In my opinion, there will be a tipping point in the near future when cryptocurrency becomes as widely used as the dollar. We are already seeing evidence of its growing acceptance as a means of facilitating commerce in the news when we hear of more and more large corporations accepting bitcoin and other cryptocurrencies in exchange for their goods and services.
A survey done by HSB in 2020 showed that 36% of all small and mid-sized businesses in the US already accept some form of cryptocurrency as a means of payment. Not to mention, companies like Microsoft, AT&T, and most recently Tesla have invested billions of dollars acquiring cryptocurrency.
I personally have started using an app called Crypto.com that makes it very easy to buy and sell Bitcoin and other cryptocurrencies. Not to mention, they have built in a very easy way to use cryptocurrency to buy everyday items via their integrated VISA card.
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