Having burst onto the scene more than a decade ago, crypto has slowly become a popular component of the global economic discourse. Despite fears about its usage in its infancy, many have now become comfortable and experienced using crypto. Yet, whilst it has very much entered the mainstream of finances in the modern era, there are many misconceptions about cryptocurrencies that dominate the public perception and understanding.
Often, half-truths and media narratives have driven a wider misunderstanding of many aspects of crypto and driven people away from truly understanding the cold, hard facts about these digital assets. As the blockchain matures and institutional adoption of cryptocurrencies becomes more widespread, separating the truth from the myth has become more essential than ever before for those looking to take advantage of investments in this booming market. For those looking to invest in digital assets and crypto, let’s debunk 10 common myths about crypto.
- Crypto Cannot Be Used In the Real World
Many people will propagate the assumption that crypto is limited to being a speculative driving force of intangible and opaque financial markets that have no real impact on global finances, nor any real-world functionality. This could not really be further from the truth in this day and age, particularly when taking a look at the widespread adoption of cryptocurrencies across many industries.
In the blockchain’s infancy, this perception held value. Bitcoin was limited in use, and many other tokens could not work effectively. However, real-world utility is now clear and widespread for cryptocurrencies. This shift has been driven in part by improved crypto on-ramp infrastructure, which allows everyday users and businesses to move from traditional banking into digital assets with fewer technical and regulatory barriers.
The blockchain can now be used for a plethora of different things, including international payment systems, supply-chain transparency, gaming economies, and even now in retail in some countries. Many online-based gaming industries, such as online casinos, rely on crypto options as part of their service nowadays.
Indeed, the market is thriving in this particular industry with a multitude of different platforms to choose from, but knowing how to choose bitcoin casinos securely can sometimes be difficult. Making the right choice using lists allows you to not only get a secure place to place your bets but also means you can utilize the advantages of crypto when online gambling, such as the rapid transaction speeds and reduced fees.
These cases of use are not hypothetical or plans for the future; they are the here and now, operation. Crypto may not have fully burst onto the scene in every industry, but with 50.6% of shoppers signalling that they believe crypto to be the future preferred tender, the idea that there is no use for crypto is very much gone.
- Crypto Is A Scam
It would be unfair not to mention that when it comes to cryptocurrency, there are, undeniably, scams. This is particularly prominent during hype cycles or the drop of new coins when honeytraps and other tactics are used to lure people into buying coins that developers know will not gain any traction. However, this sort of act doesn’t account for the full cryptocurrency ecosystem.
Cryptocurrencies have actually become increasingly regulated in recent years as they have edged into the mainstream ether. Legitimate blockchains and decentralized applications are maintained by global teams and are owned by no single company. They are also subject to audits and domestic financial regulations. People need to educate themselves on the workings of crypto rather than tarring the whole concept with the same brush.
- Crypto Is Shady
The idea that cryptocurrencies are created and solely used by the underworld of gangs, criminals and the Dark Web is a famed stereotype of these digital assets. And it is true, many of Bitcoin’s humble beginnings were associated with the Silk Road and Dark Web. It is also true that cryptocurrencies can be effectively used in illicit circumstances, but so can cash.
What needs debunking is the idea that crypto is only used for this kind of activity. The contrary is possibly more accurate, in reality. Cryptocurrencies operating using blockchain technology are actually incredibly traceable thanks to the technology involved, making them extremely transparent in the economic ecosystem.
Many law enforcement agencies actually use blockchain analysis to track illegal funding streams because it is easier to do than to track cash transactions. The proof is in the pudding when it comes to this. Only around 1% of the total cryptocurrency available is linked to illicit activity, compared with around 2-5% of fiat currencies. It seems that criminals prefer methods that are less transparent after all.
- It Is Inherently Bad For The Environment
Now, when it comes to this myth, there is a truth in its beginnings. The idea that cryptocurrencies are bad for the environment has admittedly come off the back of stats that have shown Bitcoin’s carbon footprint due to its proof-of-work mining protocol. This protocol uses an extraordinary amount of power for very little in return and is harmful to the wider environment. However, the idea that crypto will always be destructive to the climate is false. In fact, many emerging cryptos are designed with this solely in mind.
Ethereum, the second most popular crypto, has cut its energy usage by 99% after a policy change. Meanwhile, many Bitcoin miners are now solely reliant upon renewable energy sources to power their mining. Other types of crypto are emerging as viable financial options with strong environmental ethics behind them. The landscape of this is changing very quickly, and as such, the industry is only going to get greener as it evolves further.
- Losing Your Crypto Wallet Sees You Lose Everything
This myth derives from a very famous story when crypto was in its infancy, whereby a man chucked out his hard drive with his crypto private keys on it, and it went to landfill with Bitcoin that exploded in value and is said to be lost yet worth billions of USD. These days of early Bitcoin, when self-custody wallets were the primary tools used to store your crypto, are long gone. In today’s much more evolved digital asset world, there are numerous ways people can access their keys. These methods, importantly, do not impact security or safety but instead give users options for backups.
Custodial exchanges will not store keys for users, and hardware wallets can offer people secure places to hold crypto. Likewise, multi-party wallets reduce single points of failure, ensuring effective use in business settings, and social recovery tools allow trusted contacts to restore access to wallets. The idea that a single error destroys your whole crypto portfolio is long outdated and plainly wrong nowadays.
- The Crypto Bubble Will Eventually Burst
Whilst some cryptocurrencies do remain volatile in nature, the bubble appears to be far from bursting. Indeed, the rise of cryptocurrency is clear to see, and the market continues to boom year on year with no indication that it will burst. Crypto has been through many boom and bust cycles to date, but the idea that there will be a total collapse of crypto is obsolete.
Institutions are continuing to invest in crypto, and its mark on Wall St and within the wider global economic sphere continues to deepen. Developer activity is still strong and vast globally, seeing many different countries starting to accept the idea of crypto rather than reject it. This all comes on the back of widespread adoption of newer cryptocurrencies in more speculative investments alongside longer-lasting investments in crypto’s mainstay, Bitcoin, which has actually been tipped to become the new gold standard across the world thanks to its truly remarkable stability.
- You Need To Be A Tech Wizard To Be Involved In Crypto
Crypto very much feels like it is following in the footsteps of all major technological advances when it comes to widespread adoption. When the first iPod, smartphone and laptop were all introduced to the wider public, they were frowned upon and characterised by the idea that only technologically savvy people could operate them. Now they are all widespread globally, with the whole world population using them. The same is true of crypto.
Whilst initially it probably was the tech-savvy amongst us that were mainly involved in crypto, the more widespread acceptance of these digital assets has meant that apps have been designed to make things simple for investing in crypto. Exchanges function similarly to online banking, offering easy buying and sending functionality.
- Crypto Will Replace Traditional Fiat Currencies
Many have recently become concerned about the growing boom and popularity of crypto, which they foresee becoming the new norm and eventually overtaking fiat currencies as the global currency used. Whilst it is true that cryptocurrencies have become extremely popular and are edging into the everyday mainstream financial ecosystem, it would be much more realistic to assume that a hybrid system is what lies ahead. It is hard to foresee a situation where the global collapse of all established domestic fiat currencies will be replaced by digital assets or cryptocurrencies.
Instead, a hybrid future looks likely. With central banks beginning to test crypto as a viable option and banks utilizing blockchain technology for settlement, there is a clear path that crypto is becoming increasingly relied upon in the economic markets, but ultimately, crypto is not replacing the value and efficacy of fiat currencies. Instead, it is reshaping how value is moved, transferred and transacted as well as stored. Cryptocurrencies are bringing the economic markets into the 21st century.
