10 myths about bitcoin

It is likely that the number of people who have heard or read anything about bitcoin far exceeds the number of people who can boast of owning or at least dealing with the cryptocurrency in some way.

Alas, most of what people know about Bitcoin today consists of all sorts of myths and speculation. We will try to debunk the most common myths and refute the most ridiculous speculations.

Myth #1: Bitcoin is the most common online money

This statement is fundamentally wrong, as Bitcoin is not tied to any national currency and is not controlled by the financial and fiscal system of any country. This is one of the fundamental differences between cryptocurrency and traditional money. And it is for this reason that bitcoins and other cryptocurrencies are very difficult to block, seize or confiscate. In particular, bitcoins can only be seized by forcing the owner to provide access to their wallet. That is, if the owner is inaccessible to the repressive authorities of the state, then the bitcoins in a person’s possession are inaccessible to them as well.

Myth #2: Bitcoins are not a valid substitute for traditional money

In fact, bitcoins fulfill the same function as traditional money. That is, they are a measure of value, a means of payment, and a means of accumulation.

Bitcoins even have some advantages over traditional money. In particular, they are easier to store, they do not deteriorate, and they cannot be counterfeited.

Myth #3: Bitcoins have no real value, because they are not backed by gold

In fact, the security of gold is already questionable, if we talk about any currency. The real value of any currency is determined not only by its gold equivalent, but also by a great number of other factors: political, social and others. In the case of bitcoin, the value of this currency is determined primarily by its demand as a means of payment.

Myth #4: Bitcoins are illegal and actively used by the criminal world

The criminal world is very distrustful of bitcoins and prefers real money. And bitcoins are already partly legalised in some countries and have gained the status of “private money”, i.e. they are recognised as financial assets with a special regulatory procedure.

Myth #5: Bitcoins are an instrument of financial terrorism, they have a negative impact on the global economy

Cryptocurrency itself is not good or evil, but it can be used for good or for evil. Initially, bitcoins were not created for the purpose of disrupting the economies of nations. Cryptocurrency was created to preserve and expand business freedom and entrepreneurial initiative. In other words, if used correctly and intelligently, cryptocurrency can become a very effective tool for development of a country’s economy.

Myth #6: Cryptocurrencies are created and used for tax evasion

It is true that government control over the use of cryptocurrencies and taxation of related transactions is still complicated and largely unregulated. However, the volume of cryptocurrency transactions is negligible compared to the volume of traditional money transactions involved in tax evasion schemes. Therefore, to speak of the damage to economies caused by cryptocurrencies is, at the very least, frivolous.

In addition, a number of European countries have already adopted solid packages of laws and bylaws regulating cryptocurrency transactions and taxation of such activities.

Myth #7: Bitcoins will never become real money because of the availability of mining

The process of mining was relatively simple and only available in the early days of bitcoins. It is now a very complex process, requiring huge start-up and ongoing investments.

As for the demand for bitcoins as a means of payment, it is not determined by the availability of mining, but by the demand for them as an exchange value. At the moment, that demand is quite high.

Myth #8: Bitcoins are a fraud because cryptography is a “pseudoscience”

This is a completely absurd statement, as the cryptographic algorithms behind Bitcoin technology have been long and thoroughly studied. In addition, these algorithms have been successfully used in many other fields.

Myth #9: Cryptocurrency pioneers who got rich from bitcoins got their huge fortunes unfairly

Pioneers in any field are people who develop innovations, spend a lot of time, effort, and money to do so, and often take very serious risks. Therefore the result of their work is a just reward for what they have done for the advancement of human civilization.

Myth #10: 21 million bitcoins will not cover all cryptocurrency needs

Each bitcoin is about a hundred million indivisible units. Therefore, it is assumed that when the last of the 21 million bitcoins available for mining is mined, there will already be parts of that cryptocurrency in circulation: milliBitcoins and microBitcoins.