High chances you have been filled with a lot of tales, half-truths, and lies about Bitcoin, and that's why you are reading this article—to get the true picture of things. If so, then you have done the right thing. Let’s get right into correcting the wrong impressions that have been made to nurse or believe all these years.
Cryptocurrency is just a means of trading (just like fiat money), but this time without the control of banks or government agencies.
While it sounds quite like a simple and exciting change than the norm, many aren't quite enthusiastic about it. The ease of the process further makes it hard to believe. For instance, you can buy bitcoin with credit card and, after that, trade with bitcoin.
However, no major change has been met without some form of resistance or outright rejection. From the invention of refrigerators and planes to electricity and even cars, experts have always argued how bad each new invention was for a man until time and experience proved them wrong.
A publication from the popular Newsweek article in 1995 has this to say about new technological development:
“No online database will replace your daily newspaper; no CD-ROM can take the place of a competent teacher and no computer network will change the way the government works”. But how are things today?
This just goes to show that change is constant and will take some getting used to. When in doubt about the cryptocurrency market, it's best to consult an expert, a local lawyer, or read up on cryptocurrencies before delving in.
Here are the truths about Bitcoins
Bitcoin isn’t for criminals
Regardless of the intent of developing a technology and safety measures put in place, criminals will always find ways to take advantage of the weaknesses of such technology. The same is true for Bitcoins. Whether it's cell phones, paper money, credit cards, or even the internet, its use can either be bad or good, depending on those using it.
However, it’s become a common misconception that Bitcoins are predominantly used by criminals owing to their anonymity and untraceability—this is not true. Although there are features that help enhance privacy, Bitcoin is primarily a transparent cryptocurrency.
Law enforcement agencies and the government can easily trace any shady transaction done with Bitcoin if they have the right technical knowledge and resources. For instance, some cryptocurrencies are developed to provide privacy for users but also help law enforcement agencies catch criminals. Besides, users should be well-schooled on how to protect themselves from cybercriminals.
Bitcoin isn’t an illegal tender
Many equate bitcoin with Ponzi schemes. However, this is far from the truth. Just so you know, a Ponzi scheme is a fraudulent scheme that involves pulling people’s money together with a promise of a higher reward.
There are many reasons Bitcoin isn’t anywhere near being a Ponzi scheme, including:
- Bitcoin isn’t focused on recruiting investors
- Bitcoin doesn’t depend on the number of participants to function (it functions regardless of the number of users involved)
- Old bitcoin users do not need new users to fund their accounts with their money
- Bitcoin price is not fixed but rather fluctuates according to the market
- Cryptocurrency is not a centralized body channeling money to the top of a chain
Bitcoin is not a bubble
It's common to see the word "bubble" pop up anytime a product goes up at a rate never seen before. And while this has often been used to describe Bitcoin, it's not true. In 2010, a series of publications called for Amazon and Apple to have “stock bubbles” pop. However, a look at these companies today just goes to show how the previous prediction turned out.
In truth, no one can tell what the cryptocurrency future holds. But one thing is sure thus far, and Bitcoin has become stronger and bigger with every correction and advancement even amidst the outcry for its death.
Not all governments are anti-bitcoin
Currently, Bitcoin is not allowed in Algeria, Vietnam, Egypt, Turkey, Bolivia, Nepal, and Ghana. This is less than 2% of the entire globe (which consists of 195 countries). How does this then mean that most countries do not allow bitcoin as is widely speculated?
With the exceptions of these few countries, others are studying blockchain to a varying degree, to identify how best they can harness its full potential and leverage the technology that looks like it’s here to stay.
Bitcoin doesn’t hurt the Earth
One of the most ridiculous things we have heard is that bitcoin is bad for the ecosystem. It's best not to pay any heed to these sayings. Many other financial-related activities consume more energy than blockchain technology. Examples of these are the process involved in producing fiat currency and gold mining.
A report published in 2017 puts the power consumed from the production of bitcoin at a mere 8.27 terawatt-hours/year as against gold mining which consumes a whopping 132 terawatt-hours/year. Besides, blockchain technology uses renewable energy, thereby making it safe for the environment.