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Cryptocurrencies are a new and exciting investment opportunity, but there is a lot of misinformation floating around. Don’t let myths hold you back from investing in this burgeoning market. This blog post will dispel some of the most common crypto myths and help you make informed investment decisions.
Let’s take a look at these myths.
Bitcoin does not have any value
No one knows why people are willing to pay for something with no physical properties. However, we know that market value is driven by supply and demand. As demand for Bitcoin increases, so will its price tag. Bitcoin does not have any intrinsic or underlying value has never stopped humans from assigning it a value of their own accord.
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Cryptocurrency is fading
This myth is one of the greatest fears held by novice investors. As crypto prices have fallen, many are quick to believe that cryptocurrency will never succeed. However, the truth is that crypto has not failed- it’s just getting started. All new emerging technologies have required several iterations before they truly become mainstream.
For example, television and cars were first introduced to consumers as luxury items only affordable by the elite. Still, today these items are available for purchase by virtually anyone. Innovative companies will launch their “iterations” soon enough, so this myth should be dismissed as quickly as it came up.
Crypto Market is harmful to environment
This argument is no less than an exaggeration. Proof-of-work, the consensus protocol followed by most cryptocurrencies, requires a lot of electricity to work. Several experts have gone on record to say that this could lead to an increase in global temperature, which is already reaching catastrophic levels due to anthropogenic factors like CO2 emissions and deforestation.
But even with excessive mining, it would take hundreds of years before the effects are visible on a global scale; it’s not even measurable at this point. The entire crypto world uses only 0.025% of total energy consumption across the globe. So until there’s any real threat to our planet, let us ignore this myth for now.
Primarily Used for Illicit Activities
In general, Bitcoin has been associated with the dark web and the deep net marketplaces for a very long time. However, it is a common misconception that Bitcoin is used primarily for illicit activities. In fact, according to a survey conducted by researchers, approximately 80% of all drug users who have ever purchased drugs from one of these markets only used Bitcoin once throughout their purchase history.
As the same study notes, however: “bitcoin’s role within e-commerce more generally remains limited.” In other words, even though people are using Bitcoin to purchase illegal goods online, they’re not just sticking to it as their exclusive currency of choice.
The Bottom Line
So if you manage to separate fact from fiction, there is no doubt that digital currencies hold a tremendous opportunity for anyone looking to diversify their portfolio and make it less beholden to recent economic events (i.e., quantitative easing, rising interest rates). Moreover, you must avoid these myths mentioned above to be successful in the bitcoin investment.
