The Most Common Bitcoin Myths Debunked With Explanation

Digital currencies are no more a new thing. They have been operating the market for over a decade now, and its introduction witnessed them join the ranks of fiat currencies as a viable payment option. But there are certain myths about crypto, and Bitcoin to be precise. So several Bitcoin myths debunked in this article. 

Top 5 Bitcoin Myths Debunked

Despite all the advantages that digital currencies provide against fiat currencies, not many individuals are willing to try them. Why? While there is no definite answer to this question, one of the causes might be the wrong beliefs that are formed around digital currencies and their basic technology, blockchain. There are various myths about cryptocurrency. 

As per recent reports, over 60% of internet users are presently familiar with digital currency. Since familiarity reproduces contempt, a lot of intimacies and not enough data have bred some myths about crypto. Several Bitcoin myths debunked in this article. Let us have a look at 5 myths about cryptocurrency. 

Bitcoin replaces fiat money

This is the first and most important in our list of Bitcoin myths debunked. There was a period when TV was predicted to kill radio; the US dollar was once expected to substitute gold. And now digital currencies are said to be a substitute for fiat money. Do not get us wrong: we are all-in for this to occur, but the real fact is that fiat currencies are not going anywhere anytime soon.

Presently, paying with crypto is a truly smooth experience. You can either put them to a global crypto card or cash out directly with a regular bank card. However, many individuals around the globe rely on traditional paper money. Brazil is a good instance of strong dependency on cash.

Bitcoin is anonymous

Bitcoin is at times defined as ‘anonymous’ as there are chances to shift funds without offering any personal data. But that is not completely true. In fact, one should think of BTC as ‘pseudonymous’ rather. Each transaction in BTC is registered on the blockchain under a wallet address. If that wallet address is ever linked to your original identity, then you are exposed!

Moreover, there are refined instruments that are used by financial entities and governments to track the identities and that offer blockchain forensics for illegal activities.

Bitcoin has no intrinsic value

The notion that BTC has some great intrinsic value is just a joke according to Warren Buffett, who is one of the most influential investors around the globe. And guess what? He is correct.

Now, do you imagine fiat currencies have intrinsic value? Almost nothing in the space of trading and money has it. The price of fiat money, which is issued by nations, hugely depends on the support that is fixed by governments.

BTC, unlike the dollar or the euro, has a restricted supply, which is surely a point on its side as it cannot be easily operated.

Bitcoin is untaxable

Even though some nations such as Liechtenstein, South Korea, and the Netherlands do not levy taxes on digital currencies, other countries like Spain have already warned tax payers about needed contributions to the government arcs connected to their crypto activities.

Taxation on crypto differs depending on how nations perceive digital assets. For instance, in the United States, United Kingdom, and Australia, it is taxed as a capital gain. In other countries like Germany, the taxation will vary on whether you are purchasing or selling it.

Bitcoin is illegal

Among our list of Bitcoin myths debunked, this is the last important one. Back in the 1970s, the Medell Cartel mdash; one of the biggest organized drug cartels in history; was earning $60 million in drug profits every day. Does it make the dollar an illegal currency?

The idea that criminals use a certain currency does not make it illegal. It is evident that crypto is highly linked with illegal transactions. For example, a study done in Australia illustrated that 46% of BTC transactions were involved in unlawful actions. But this does not imply that it is solely used for illegal activities. Any other currency can also be availed for carrying illegal transactions. This is a very big cryptocurrency criticism. 

The Bottom Line

In my opinion, Bitcoin is surely a catalyst of innovation and could turn into a key player in the future of our financial system globally. Money, which has developed via the millennia from cowrie shells to clay tablets to precious metals, bank balances, and bank notes, is taking another crucial step into the future. Money is turning out to be digital. Purchasing BTC could offer a route to get exposure to that future. However, the success of Bitcoin is not assured, and it may not be an appropriate investment for all. As with any new model, there are uncertainties and risks. To evaluate Bitcoin, here are some Bitcoin myths debunked that should be known.

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