Cryptocurrencies have gained popularity phenomenally in the last few years. But, due to a lack of control over crypto transactions and coin generation by a central regulatory body, the gamut of cryptocurrency has always been clouded with misconceptions and myths. Such misleading information usually leads to investors and buyers being wary of cryptocurrencies. Not just globally, in India too, as the reach of cryptocurrencies multiply, more and more delusional stories keep coming out, spreading like wildfire. Today, this blog will talk about common misconceptions about cryptocurrency and debunk these hearsay stories.
In general, when hearing the word 'cryptocurrency,' people instantly conjure terms like illicit and illegal. It is a pervasive misconception amongst the masses. It is true that some amount of nefarious activities were indulged in by people in the past. Some criminal enterprises have also been involved in certain illicit activities. However, it is unfair to assume that such illegal activities occur only with crypto coins. The truth is that fiat currencies are as much vulnerable as cryptocurrencies. The reason behind this myth is that digital currencies are beyond standard regulations and control, and added to that, these are anonymous. While the anonymity of the currency is a big motivator and can possibly attract criminals, evil-minded people can also engage in illicit activities with fiat currencies. Black marketing has been prevalent for a long time now, and that has mostly revolved around the standard currencies. Recent research of the Bitcoin network has revealed that there was a time when crypto coins like Bitcoins were used in nefarious activities; things have improved dramatically in the past few years. Today, only a negligible percentage of the total activities are involved in illegal activities.
This common cryptocurrency myth stems from the misconception mentioned above. Shrouded by different high-profile scams online, there have been numerous incidents involving cryptocurrencies. The vulnerabilities of digital wallets make them prone to online thefts, hacks, and frauds. However, the main network where crypto coins are mined is run on blockchain technology which is by far one of the most robust technologies that are impenetrable mostly. What is vulnerable is the individual user's wallet or the exchange website. It is crucial to pick the right crypto wallet app and a trusted exchange site. This misconception can be easily contradicted because many governments, banks, financial institutions, and leading corporates are now opening up to blockchain technology and the crypto niche.
Another noteworthy crypto myth is that this is part of a scam network. However, investing in cryptocoins is as good as any other investment and needs to be done backed by sound knowledge, caution, and skepticism. The truth is that investment opportunities of any kind in the traditional financial world or the crypto landscape should be reviewed and analyzed thoroughly before any decision. And risks are always an integral part of investments. Therefore, it is unfair to term crypto investments as dubious and scam-prone.
This is another common misconception about digital currency. One of the myths and facts about cryptocurrency is that the landscape of cryptocurrency is overtly complex. However, it seems so because of complex mathematical computations backing crypto mining and blockchain technology. However, most of the work happens on the exchange sites for an investor, buyer, or seller. One needs to create an account and have a crypto wallet to engage in crypto transactions until and unless you aim to become a miner, the landscape of cryptocurrency is quite fathomable and comprehensible.
Another cryptocurrency misinformation is that you have missed the bus. It is too expensive now to buy cryptocoins. Some feel that there are very few Bitcoins or coins of leading cryptocurrencies left to invest in. indeed, cryptocurrencies are usually quite expensive, some platforms, especially in India that offer buyers the opportunity to invest in a small percentage of the crypto coin's value, thereby making it easy for people to invest. Some platforms even offer interest rates on cryptocurrency investments.
There is a cryptocurrency myth and reality, both simultaneously. The crypto market is indeed vulnerable to misinformation passed by the media. It is because the market is highly volatile and influenced by sentiments. For example, in September 2021, news doing the rounds was about Walmart partnering with Litecoin and would now start to accept crypto coin payments. Till the time Walmart denied the news, the price of Litecoin had risen from $175 to $240. The moment Walmart issued a denial, the price rock-bottomed in no time leaving many investors flustered and frustrated. So, there is some amount of truth in this statement, and it is not completely a myth. But, such issues are quite a regular happening in the real world. It is always advisable to; therefore, access authenticated information from the official website of the companies involved before believing in such kind of information.
One of the common myths about cryptocurrency is that it is the same thing as blockchain. The truth is that these are two different things. Blockchain is the technology that is used for mining and transacting with cryptocurrencies. The blockchain records every transactional data in separate blocks that are processed every ten minutes. Also, many people think that there is one blockchain. But the fact is that every cryptocurrency has its own blockchain. These all vary from one another and never interact. For example, you cannot buy Bitcoins over the Litecoin blockchain.
Since there are so many falsified myths and misconceptions about cryptocoins, it is advisable to gather all details about crypto investments before proceeding.