The top 5 crypto myths of 2018
Following on from our previous blog on things that are not true about cryptocurrency, we wanted to deliver part 2, to address some new rumours that we are seeing floating around the media following the current market situation.
Cryptocurrency mining will consume all of the world’s energy by 2020
There is no denying that the mining of cryptocurrency is a costly process. Miners use special equipment to mine crypto, which is energy intensive. With global warming being one of humanity’s greatest challenges it is no surprise that there is a lot of negativity surrounding cryptocurrency, energy consumption and its potentially harmful impact on the environment. However, research which suggests that Bitcoin uses 1% of the entire world’s energy is very misleading as the crypto space has evolved, cryptocurrency mining is actually driving green energy innovation.
The energy used to power a large percentage of Bitcoin mining farms comes from the energy which has already been produced has not been used and which certain countries are desperate to offload. For example, in the case of solar energy or wind farm energy it is difficult to unload energy which has already been created. When the supply outweighs the demand it is not possible to just turn the energy off, if it is not used then it goes to waste.
This is a common issue in countries such as China, where around 70% of Bitcoin is mined. Here, Bitcoin miners are making use of unwanted solar energy that would otherwise go to waste.
There are also many ICO’s and mining farms that are dedicated to the use of renewable energy mining, such as Hydrominer, located in the Austrian Alps, which uses renewable hydroelectricity and Golden Fleece which set up a mining farm in an abandoned factory in Georgia that uses energy that is generated by flowing water from the nearby mountains.
Another example is Estonia, which has a state-owned wind farm that resides on a small island in one of the windies parts of the country, providing an endless supply of green energy for the mining of Bitcoin and Ethereum.
2. Bitcoin is too expensive
There is emphasis placed on the cost of one Bitcoin, yes it can be costly depending on the market price at the time that you decide to invest and how much you would like to own.
Many people are put off investing in Bitcoin because they are under the assumption that to be able to invest they need to be able to afford to buy a whole Bitcoin, this is actually not the case.
Bitcoin is divisible into units, which means that you can buy half a bitcoin, quarter a Bitcoin and even a fraction of Bitcoin depending on how much money you have available to invest. The smallest amount of Bitcoin that you can purchase is called a Satoshi, named after Bitcoin’s creator Satoshi Nakamoto.
For example, at the time of writing this, $100 USD = 3,047,998 Satoshi = 0.03047998 BTC. Suddenly the concept of owning Bitcoin does not seem quite so out of reach now, does it?
3. There is not enough Bitcoin
Bitcoin is unique in that there is a cap on the amount that will ever be created, 21 million to be exact. With all the talk of Bitcoin replacing money as we know it, something that has come to light is that some are under the impression that the finite amount of bitcoin’s will be a limitation.
The answer is no — this will not become a limitation because another unique factor about Bitcoin is that transactions can be denominated into smaller sub-units which are called bits! There are 1,000,000 bits in 1 bitcoin. As transaction size decreases, the number of sub-units can be increased in the future if needed.
4. Investing in Cryptocurrency is still too complicated for regular people
This one we agreed on to a certain extent, there is still a lot of talk about market value and regulation and less talk about education and adoption. To invest in the space you do not need to be technically minded, you don’t need to understand the mining process, know to how to code or have a comprehensive knowledge of how to use the blockchain.
There is far more relevance placed on the aspects of the creation of cryptocurrency than there ever has been in fiat currency, many of you won’t have given a second thought as to how fiat is created and how the printing presses are used. And yet you still use fiat every day! Are all of those who have invested in shares in Google experts in SEO and search algorithms? The fact is, the mainstream media and cynics are over-complicating the crypto space creating a dark cloud over the concept because they fear it, what better a way to increase negativity than to create confusion?
The most important thing to know is what cryptocurrency is, the problems it solves, how you can invest, what the different types of coins are available and where you can invest.
There is still a large gap in the market for cryptocurrency and blockchain education, one that we are only now 10 years on starting to see fill. Education is the key to understanding everything in life, that is why we created B21 Life our cryptocurrency education and training app. Why not take the time to download it today, participate in some lessons, watch some training videos and read our short and simple facts about cryptocurrency and then decide if it is still too complicated for the average person!
5. Bitcoin is dead!
We thought that we would save the best until last, Bitcoin is not dead! The market has seen a very tough few months and while the price of Bitcoin and other cryptocurrencies have fallen, dramatically — they still have value! Bitcoin is worth $3590 at the time of writing this, while this is a significant drop since it’s $20000 highlight in December 2017, it’s worth noting that Bitcoin entered the market at just $1! As with any type of investment opportunity, it is volatile and the price is unpredictable and is always set to fluctuate.
According to a recent study by Cambridge University, while prices have declined significantly this year, cryptocurrency user numbers have increased to an all-time high! Bitcoin might be going through a rough patch but it is most definitely not dead!
The above are just a few of the untrue statements that we have seen lately circulating around online. If you have any questions that you would like us to address, feel free to comment below.
To find out some true facts about cryptocurrency check out the ‘Did you know’ channel on B21 Life, our free cryptocurrency education and training app!