7 Biggest Bitcoin Myths
Table of Contents
1. It is just a bubble!
The bubble is characterized by speculative investments and unsustainable rises. Bitcoin, on the other hand, has gone through multiple economic cycles since its entrance to the market and it could each time recover and mark new highs. The fluctuations are interpreted by major investors as a typical pattern of new markets, and it is claimed that those fluctuations will be slower and less frequent as the cryptocurrency achieves relative stability over time.
2. It is not useful in the real world!
This is just false. For many years now, bitcoin has been used to make payments with no mediator involved. Each day a new company enables cryptocurrency transactions. It is increasingly being adopted by investors, customers, and companies as an inflation-resistant money form. It is also claimed that bitcoin is used for illicit activities. Compared to USD, the amount of Bitcoin that is misused is very rare. Only 2.1% of the currency was related to criminal activity in 2019. And since its operations are on an open blockchain, tracking illegal activity is much easier for authorities.
3. It does not have real value!
The fact that it is not tangible does not mean that it is not real. Think about it, how much of the money you use today do you physically hold? The physical existence has already remained to be a precondition for money to have real value, even before the emergence of cryptocurrency.
Bitcoin is scarce, thus it is inflation-resistance. And thus, it has – and will be – significant value. The basic economic principle of supply-demand leads to a steady increase in its value over the long term.
4. It will be replaced by another currency!
Bitcoin is the first and most circulated form of cryptocurrencies. The competitors have never come close to overtaking Bitcoin despite their promises of several advantages or new features. Bitcoin makes up around 60% of the cryptocurrency market. It is a new and dynamic market so it is likely that a bigger rival can emerge. However, most experts claim that Bitcoin will not be replaced anytime soon.
5. It is gambling!
Bitcoin has faced significant fluctuations so far. However, it continues to mature; it attracts institutional investment; its trendline in the long term has always been upward. Due to these and several other factors, its volatility lowers down. Navigating volatile markets is definitely a risky business. However, given that its trendline has been mostly upward and most of the time it provides the investors with positive returns, gambling is not the right word for it!
6. It is not secure!
Quite the contrary, the core protocol of Bitcoin functions securely from the beginning. Its network could never be hacked. Open-source code and numerous computing power in 100 countries around the world secure the network.
7. It harms the environment
It is true that mining requires a large amount of energy. However, recent research shows that its environmental footprint is quite marginal when compared to the entire global banking system (not only the digital transactions but also powering office buildings, branches, ATMs, etc.). The research also states that a remarkable portion of the mining process is sustained by renewable energy (wind, solar, and hydro).