It's often said there are two types of people in the world, those who love cryptocurrencies, and those who don't fully understand them. Thanks in part to the widespread and overly simplified news coverage of cryptocurrencies like Bitcoin, there are plenty of myths circulating that need to be dispelled. Here are the top five myths that Bitcoin cannot seem to shake...
1. It has no value
People often worry that Bitcoin is just a fad. Some fear that it could just go away, taking its equivalent value in fiat currency with it. Cryptocurrencies are no different to other currencies in that they can be used to buy goods and services, meaning that they do indeed have value.
2. It isn't backed by anything
When people say this, they mean that it isn't backed by any real-world entity and therefore doesn't have value like the euro or the British pound. Like all currencies, Bitcoin's value comes from simple supply and demand economics. The USD hasn't been backed with gold since 1970; the world's gold supplies simply couldn't keep up. At the moment, no currency in the world is backed by gold, so Bitcoin is no different.
3. It's only for criminals
Bitcoin is an anonymous currency, which means it gained popularity on illegal sites like Silk Road. However, it's important to remember that it's the transactions that are illegal in this sense, not the currency. Plenty of criminals still prefer USD as their currency of choice, but this seemingly doesn't tarnish the USD's reputation like it does for Bitcoin.
4. It's not eco-friendly
When people point to the eco-friendly credentials of Bitcoin, they are referring to the act of mining it, which uses high powered servers. Some say that this leaves a large carbon footprint, but this couldn't be further from the case. Many supporters of Bitcoin have been quick to point out that the value of mining Bitcoin far outweighs the real-world cost.
5. It's not secure
Governments and many large organisations are currently looking at ways in which they can use Blockchain – the technology that makes Bitcoin possible – to secure their data. This is because Blockchain hasn't suffered a data breach since it was created. This makes it far more secure than your regular bank account.
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