6 Shocking Myths On Cryptocurrency Debunked

Welcome to another episode on Crypto for Newbies where we talk all things cryptocurrency. Previously, we learned important crypto terms, their meanings & differences. In this episode, we’ll debunk a few myths involving cryptocurrency and the blockchain.  

How many times have you heard the phrase, “bitcoin is a scam”? In this episode, we explain what’s true about crypto and what isn’t. 

The first thing you need to know is that there are a lot of misconceptions concerning cryptocurrencies. Some people still have doubts about this financial system because they believe it has dubious elements.  

The truth is, many people just don’t understand how the world of cryptocurrency works and so, misinformation rapidly increases. Thankfully, you found our page and you’re about to find out what’s real and what’s not. 

1. Only tech-savvy people can invest in cryptocurrency

Anyone who wants to invest in cryptocurrency is free to do so. They are not exclusive to the technology industry, rather, they are for everyone from every industry. You need only have a basic understanding of their usage and up-to-date information about investing.  

2. Cryptocurrencies are a danger to the environment

Cryptocurrency is created through a process called, “mining”. To the uninformed reader, what immediately comes to mind is a picture of miners down in trenches digging up rare minerals. However, mine workers aren’t the only ones who call themselves miners.  

To mine cryptocurrencies, companies invest a lot of money in specialized equipment. This equipment consumes a lot of electricity. This fact has given rise to the notion that cryptocurrencies are harmful to the environment, as some believe that requiring so much electricity must be harmful to the environment. This is not so. Extensive studies show that “not all cryptocurrencies have significant environmental impacts and many of them do not use mining at all.”

3. Cryptocurrencies can be forged

Cryptocurrencies are impossible to forge. Each crypto coin has its own set of codes, making it impossible to forge. Because of the blockchain technology employed by cryptocurrencies, it is impossible to keep track of a person’s transactions or the sequence in which they are completed. Because they cannot be counterfeited, such transactions cannot be copied, neither can equal virtual currencies created. After detecting them, the system would crash in a matter of seconds.

4. Cryptocurrency is the same as blockchain technology

People often believe that these terms are interchangeable, but they are not. The blockchain is the technology that runs cryptocurrency. That is to say, the blockchain is the technology cryptocurrency operates on. So, if you believed they were the same, you’re mistaken. 

5. The government can prohibit cryptocurrencies

The government cannot prohibit them because of one key quality – decentralization. Why? Because the technology that underpins them (blockchain) is a decentralized system that is not governed by any government or entity. As a result, the government cannot alter or modify them. One major distinction between crypto-assets and fiat money is decentralization. 

6. Cryptocurrency is a fad based on passing trends. 

When the internet initially became popular, it was predicted to be a fad. The same thing happened when smartphones were introduced. Back then, brick-and-mortar shops resisted the move online. 

But look where we are now; we’re a global market that uses the internet and smartphones for almost everything we do. Truthfully, your willingness to accept cryptocurrency now is of little consequence because it will eventually find its way into your life whether you want it to or not.  

Bottom line 

What do you think about these myths? Do you believe any of them? Many people are afraid to use or invest in cryptocurrency due to a false notion. If you’re one of them, forget about all you’ve heard. Find out facts for yourself. Wait till you’re confident enough to invest in cryptocurrency. Then dive right in.