Cryptocurrency has had an explosive amount of growth, since the introduction of Bitcoin in 2009. The journey from obscurity to one of the most popular buzzwords of 2021 has not been an easy one. Over the last 13 years crypto has been doubted by many, including some of the most respected investors on and off Wall Street, and in some cases rightfully so, however, some doubts are just myths.
Here are 5 of the most common myths about crypto and why they aren’t true:
1. Crypto is only used for illegal activity.
According to one analysis by Chainanalysis, a company that partners with investigators into crypto crimes, the total number of transactions recorded on the blockchain that were used for illegal activity was less than 1% in 2020. Of that 1%, roughly 50% of them were just crypto scams, something that is seen all over the internet.
2. Crypto has no real value.
Its value may be hard to grasp for some given that up until very recently every thing with monetary value had some physical form. But crypto gains its value by other means, most commonly utility. For example, Ethereum, which is a Network on which you can build software products, applications, internet infrastructure, and NFTs.
3. Cryptocurrencies are a scam.
While some cryptocurrencies may be used in scams, the coin itself is usually not an outright scam. There are a few examples of scam coins such as Bitconnect but most of the time through doing your own due diligence and researching a project before investing, you can avoid these. All it takes is just a few quick google searches and you can normally figure out if a project is legitimate or not. And like the old saying goes If it sounds too good to be true, it probably is a scam.
4. Using crypto is an anonymous activity.
Many think since cryptos such as bitcoin are decentralized and happen with unnamed wallets that their transactions are anonymous and hidden, but this is not the case. Crypto works by recording transactions on an open ledger which anyone can access, and organizations such as the FBI have been able to study the transactions and wallets and trace illegal activity to the owner and seize the illicit funds.
5. Crypto is just a fad.
While it may have only been around for 13 years, that’s a little longer than fad and crypto has proven itself to be more than just a trend moving beyond Dogecoin, Safemoon, and other viral ‘meme coins’ of 2020 and 2021. Projects such as Ethereum, Avalanche, PancakeSwap, Terra Luna, USDC, and others have various utilities and advantages to traditional finance and software products, making them more valuable long term and as some experts predict the new generation of the internet.
Over the next 5 years as governments start to take notice and add regulation and hedge funds and Wall Street dip their feet in the water, crypto will become increasingly more popular and integrated in everyday life. Certainly there are things to be aware of in the crypto space, but just like the internet revolution of the late ‘90s and early 2000’s, the space starts out a little unstable and volatile until it becomes adopted by the masses. People doubted the internet, and people will doubt crypto, but it is evident this new technology is here to stay and will continue to improve over the years.