Nowadays, due to the constant expansion of the Internet, cryptocurrencies are replacing fiat currencies in many fields. They facilitate transactions in numerous ways, which is why a wide range of markets feature them. In the past several years, electronic cash has become a preferred payment method of a vast number of people.
Even though cryptocurrencies offer a variety of advantages, they still create confusion. That comes as no surprise, since they have only recently come to be, and therefore represent an unexplored area. The confusion and the lack of information have resulted in common misconceptions about cryptocurrencies.
In this article, we will list the most prominent myths surrounding electronic cash and offer you valuable information with the intention of dispelling them.
Bitcoin Equals Blockchain
Bitcoin is the first and most famous cryptocurrency. Due to its popularity, it is probably the one that is misunderstood the most. Many people confuse Bitcoin, a digital asset, and blockchain. This is understandable since the latter hasn’t been receiving enough attention. Essentially, blockchain is a decentralized public register whose purpose is to file digital transactions. The original intention was for it to record Bitcoin transactions. However, one can transfer anything of value using the blockchain technology.
Cryptocurrencies Jeopardize Your Safety
Due to anonymity cryptocurrencies generally provide, many people are suspicious of them, believing that they are not safe. The most common myth surrounding blockchain is that it is the perfect channel for illegal transactions. However, anonymity related to cryptocurrencies is overrated. Blockchain transactions are transparent and easily traceable, which is why criminals usually avoid it. Their preferred option is actually cash, which, unlike electronic money, offers the possibility of erasing traces of transactions.
Cryptocurrencies Are Worthless
Since cryptocurrencies still represent a novelty, many people have difficulties comprehending their value. The greatest difference between fiat currencies and cryptocurrencies is the fact that the latter are not tangible. That is precisely the reason why certain people still cannot come to terms with their existence. In reality, cryptocurrencies are global currencies with real value. Moreover, according to experts in the area, cryptocurrencies are a better investment in comparison to fiat currencies.
Cryptocurrencies Are Not Lawful
Since cryptocurrencies are still new to the market, they have yet to be regulated properly. Nevertheless, that does not make them illegal. At the moment, blockchain transactions are considered illegal in only one nation in the Group of Twenty.
Coins Equal Tokens
The most common misconception regarding coins and tokens is that the two are synonymous. Whereas a coin is a unit of a particular currency, the purpose of a token is much vaster. The prominent examples of coins are Bitcoin (BTC) and Ethereum (ETH). Much like any other unit of currency, the value of coin varies. Token, on the other hand, has functions other than making payments, such as closing digital contracts.
Myth vs Truth: Closure
All the myths we have listed originate from the lack of knowledge people have of cryptocurrencies, in general. Since digitalization pervades every aspect of life, it is essential that you differentiate myths from the truth when it comes to this subject.