Cryptocurrency or digital currency has become a very widely known market; however, despite its popularity, surprisingly, the concept of cryptocurrency is still not properly understood by many of us. Digital currency is surrounded by countless misconceptions and myths that have caused problems, even monetary ones, for the new beginners.
To help you understand the concept better this article will clarify some of the most common misconceptions about digital money.
Cryptocurrency is a sham
No, it is not! Cryptocurrency is real and it is making people rich. In fact, many experts in the finance industry believe that digital money has the potential to change how the finance sector works. It is true that just like with our conventional currencies, digital money has also attracted scammers who lure traders, especially beginners, to invest in their scam investment programs, but the cryptocurrency industry itself is not a sham.
Bitcoin is the only Cryptocurrency
No, bitcoins are one of the different types of cryptocurrencies that are generated for digital money traders. It is the most powerful and the first of its kind, but it certainly is not the only one.
Bitcoins are gold coins
Bitcoins are not gold coins, in fact, they do not have any physical form. Bitcoin, like other cryptocurrencies, is digital money.
Cryptocurrency is a cryptic program trying to devalue fiat money
Yes, it is uses cryptic technology but no it will not replace or devalue our conventional currencies. A few digital assets even collaborate with banks; one such example is XRP, which has been created to offer business solutions that financial institutions face. Other similar digital currencies have also been created to solve similar problems. Digital currency will actually aid our existing financial industry and make it more powerful.
It is too late to invest
We keep hearing how the value of digital money has skyrocketed over the past few years, which leads us to believe that it may be too late to invest now. To put all rumors to rest, it is not too late to make a move. The technology is still relatively new and its full potential is yet to be realized. Cryptocurrency market still offers a massive room for growth.
Bitcoin is a stock
Bitcoin is not a stock; it is a currency, which means you cannot predict its value like you do of a stock.
Cryptocurrency transactions are anonymous
This could not be farther from the truth; all transactions are recorded in a public ledger known as blockchain, which can be accessed by the public. It allows you to see how much value was moved from one trader to another.
Bitcoin mining is similar to redeeming vouchers
Mining is not a process where you collect a certain number of bitcoins or other digital currencies and then exchange them for money. Miners have to compete with each other to solve complex mathematical problems or puzzles that are derived from cryptic hash algorithms. Upon solving the problem successfully, miners are given rewards which could be transaction fee or new bitcoins.
Bitcoins are unlimited
The number of bitcoins generated goes down every four years. By the year 2140 the world will be out of new bitcoins; by this time we will have 21 million bitcoins and new coins will not be issued.
Bitcoins are for criminals
It is a common misconception that bitcoins are ideal for criminals since it cannot be traced. True due to its decentralization and anonymity the currency attracts criminals but it is also a great asset for law-abiding citizens for the exact same features. Bitcoins can be ideal if you live in a country with an unstable economy or when you fear banks and other financial institutions are corrupted.