MYTHS ABOUT CRYPTOCURRENCY DEBUNKED
When we are confronted with new ideas and concepts, it’s perfectly natural to be wary of them, especially with a concept as seemingly complex as cryptocurrency. With cryptocurrency becoming more popular, people are increasingly bombarded with contrasting information from different sources. This can make it quite hard for rookies to know what to believe. That is why we have compiled a list of 5 things you’ve probably heard about cryptocurrency and whether they are myth or fact.
Cryptocurrency is a ruse used by con artists
One of the most touted features of cryptocurrency is that it is largely decentralized. While this is a great thing because it takes power from big corporations and governments, it can also be a problem. There have been cases in the past where cryptocurrencies turned out to be scams and founders ran off with invested funds. This is why if you’re investing in any cryptocurrency, you need to be careful. Read the white papers of the cryptocurrency, find out if they have legitimate investors, do Google searches of the founders, find their online communities, and ask a lot of questions.
Verdict: It’s true, cryptocurrency can be used by con artists, but so can fiat currencies. The key is to be cautious and do your due diligence before investing.
It has no real value
Cryptocurrencies are just as real as fiat currencies. Like fiat currencies, cryptocurrencies can be used as a means of exchanging goods and services. Most people who think cryptocurrencies have no real value believe so because they cannot see it. However, cryptocurrency is just as real as money in a bank account.
Verdict: This is a myth. Cryptocurrency has as much real value as fiat currency does.
It will take the place of fiat money.
Yes, cryptocurrency allows transfer of money without the use of a third party, with a plethora of future applications on the horizon. However, we must remember that cryptocurrencies are digital and, hard as it may be to believe, not everyone has access to the internet yet. Cryptocurrencies are also restricted in number and lack regulations that would make governments fully accept them. These are some of the factors that might keep it from completely replacing fiat money. Even today, people fund their crypto wallets by buying coins with fiat currencies. This means there is still some level of dependency on fiat currency.
Verdict: Only a fortune teller can say. However, with internet penetration still so low in many rural communities, it will be some time before cryptocurrency can truly displace fiat currencies.
Cryptocurrency is tax-free.
Another half-truth is that cryptocurrency cannot be taxed since it is not controlled centrally like the government. This may seem like a reasonable point, but — spoiler alert — it isn’t the case. Some governments may and do tax cryptocurrency owners, even though the currency is not recognized as legal tender by most countries. It is treated as a capital asset in many countries and hence is taxable. However, in 2021, El Salvador became the first country in the world to make Bitcoin legal tender.
Verdict: This is both true and untrue, depending on the country you are in.
They harm the environment.
Unfortunately, this is correct; but, it is also a half-truth. This is a question regarding the type of energy used in cryptocurrency mining. However, each year, the manufacturing and maintenance of current fiat money systems, such as banking deposits and paper money, emits over 400 million metric tons of CO2. This is more than four times the amount of CO2 produced by Bitcoin mining. Furthermore, not all cryptocurrencies use the “Proof of Work’’ consensus mechanism, which necessitates the need for mining rigs. Wicrypt and Ethereum, the second most popular cryptocurrency, are among the “Proof of Stake” coins that have joined the team. To mine Wicrypt Network Tokens (WNT$) you do not need to set up a mining rig. All you need is the Wicrypt Router or Mi-Fi. It’s that simple! Then you can build a massive crypto investment portfolio just by surfing the internet. Go figure!
Verdict: While this is true, fiat currencies cause even more harm to the environment than cryptocurrencies.
Conclusion
Myths are unavoidable, but they can serve as a prison for those who refuse to seek liberation by discovering the truth. Before you take any information about cryptocurrencies at face value, you need to DYOR (Do Your Own Research) and be a truth seeker.
Which of these myths did you believe completely before reading this? What other things have you heard about cryptocurrencies? Let us know in the comment section.
