Top Cryptocurrencies Myths Busted

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BLOCK6

3 min readJul 26, 2022

Cryptocurrency is still in its infancy and is widely misunderstood, giving rise to a plethora of myths.

This article attempts to provide an objective overview of the subject by shedding light on the facts behind the myths surrounding cryptocurrencies and blockchain technology.

Myth #1: Cryptocurrencies Have No Real Money Value

This is perhaps the most common misconception about cryptocurrencies, as there is no physical asset to back them up. People who trade in cryptocurrencies, on the other hand, believe in their inherent value and have been supporting the system since 2008. Cryptocurrencies are here to stay as long as there are people who believe in and understand their value.

Myth #2: Cryptocurrency Transactions are Anonymous

The blockchain, a public ledger, keeps track of everything. There is anonymity, but in extreme cases, identifying users and their personal information is not difficult. There is user anonymity, as with any other platform, but it is not absolute.

Myth #3: Bitcoin is Not Scarce Because It Can Just Be Forked

Bitcoin has been forked 105 times, with 74 of them still being relevant and active. It has also spawned numerous spinoffs that mimic key design elements. This is not a bug, but rather a feature. Bitcoin is based solely on economic value. Miners and users will switch if another coin is perceived to be superior. In August 2017, the first major fork resulted in Bitcoin Cash (BCH).

The difficult part is challenging Bitcoin’s brand and first mover advantage. Bitcoin has a well-established network effect and scarcity, with over 11,000 nodes. Despite being worth more than $45 billion, blocks mined by its creator have never been moved.

This reinforces its integrity and decentralization. You can copy code but you cannot copy its qualities.

Myth #4: Bitcoin is not Backed By Anything

Over 11,000 nodes (and counting) actively maintain the Bitcoin network, while the mining process consumes 150 million Terra hashes per second of energy. This ensures that all transactions are valid, that new Bitcoins are issued, that new transactions are confirmed, and that balances are not spent twice.

This creates a secure ring around the Bitcoin network, with no one in charge. All life on Earth is powered by energy, so why shouldn’t our money be? Bitcoin has a significant carbon footprint because miners are rewarded with Bitcoin in exchange for keeping the network secure with their CPU power. Existing fiat money is only supported by the authority and legitimacy of those in control of it.

Myth #5: There is Only One Huge Blockchain in Place

There are several types of blockchains. Blockchain is a technology that can solve a variety of problems. They can be public, private, or both, with an open or closed source. While one type of blockchain may support Bitcoin, others may support cryptocurrencies such as Ethereum, XRP or Cardano.

In Summary

That widespread lack of knowledge and trust is an ideal breeding ground for misinformation — and there is no shortage of it when it comes to cryptocurrency.