Since first discovered in 2009, cryptocurrency has attained an unimaginable growth, revealing the knowledge of its existence to a vast amount of people. Today, cryptocurrency is not only seen as competitors to centralized finances (cefi) like the banks, but they have also conquered the problems their predecessors faced.
In the world of finance today, cryptocurrency has created a space of its own, where individuals are given full control over how their finances are being managed, providing ledgers that help validate their authentication and assist their users with a sense of security.
With the knowledge of how powerful cryptocurrency space appears, the nature and complexity of how it works, brought about rumors and myths concerning this digital currency. The immense growth of cryptocurrency has not only ignited fear in a lot of people, but also has been a source of concern. This is due to the fact that the crypto space has developed a different operating system to the norms, giving rise to these rumors.
We would be listing in no given order, some of the common myths associated with cryptocurrency, backed up with facts in order to help you make the best possible decision to whether there is truth to these myths.
1. Cryptocurrency is only used for illegitimate activities
This by far, is the greatest scare of people that are new to digital currency and how it works. Although, you could say some people or a set of organizations with ill intentions use digital currencies to carry out fraudulent activities.
The fact still remains that, through the number of years cryptocurrency has existed, the rate at which illicit activities are carried out within the platform has reduced drastically. According to chainalysis, recent analysis has shown that only a minimum of 0.34% of cryptocurrency transactions are scam related.
Different measures have been adopted by different countries to combat and reduce the rate at which these digital currencies are being involved in illegitimate activities.
2. Digital currency have no value
The value of an asset is embraced by the society when that asset has shown to be of importance, has experienced immense growth and is generally acceptable by a considerable number of people in the society.
Now, without doubt, these digital currencies have met everyone of these categories listed. For instance, it’s no news that ever since the introduction of Bitcoin dated back in the year 2009, the price has skyrocketed from a value less than a penny to over $69,000 per Bitcoin as of 2021.
Hoarding cryptocurrencies for long term purposes are being adopted by people and enterprises as a means of financial investments, venture capitals and so on.
3. Cryptocurrencies are not secure
The entirety of cryptocurrencies are being backed by the Block chain technology. A Block chain technology is a secure structure, setup with an encrypted technology to store transactional records. As it implies in the name, a block is formed whenever pieces of information about a user transaction are recorded.
As more information is stored, the chain continues to build up and for every transaction made, it must be authorized by the digital signature of its user, this therefore proves the authentication of the transaction and protects it from possible tampering.
There are possible methods to which you can properly keep your cryptocurrency safe. For instance, storing your cryptocurrencies in decentralized wallets which are only accessible by you and also the use of secured platforms to carry out your transactions like a personal laptop is key.
4. Cryptocurrencies and how they affect the environment
It is an important factor to look into how digital currencies affect the environment. One of the major environmental impacts of cryptocurrency, has to do with their intensive energy consumption rate which is used to carry out and validate their transaction and other activities related.
Also, with an estimated value of over 2100 kilowatts hour(kWh) a Bitcoin transaction requires, which is equivalent to roughly what an average household in the US would use for 75 days, proves without doubt that this cryptocurrency requires a worrisome amount of energy to function.
The sources of electricity energy required can be derived from either a fossil- fuel powered grid which generates a high amount of carbon pollution that is very harmful to the environment or a sustainable energy which impacts the environment on a lower scale.
5. Cryptocurrency is a scam
In recent times, cryptocurrencies are gradually becoming an acceptable means of exchange. Many retailers and vendors accept them during transactions, and different countries are looking for ways to properly regulate them into their financial system. It’s important to understand that most digital currencies developed, were not made with programming codes to extort money from people.
A lot of people have come up with ways to trick and further deceive people into giving them their cryptocurrencies or money. Some come with the intent of growing your cryptocurrency while others pose to be government officials looking for debt to be paid.
Even if it had proven to be impossible to fully eradicate this threat, raising awareness to how they operate is key to reducing the chances of it’s repeated occurrence.
