Bitcoin has been here almost for a decade now but there continue to be myths surrounding the king of cryptocurrencies that keeps percolating amongst the newbies and veterans alike.
Nevertheless, the best way is to clarify these myths because any truly decentralized and censorship-resistant tech is bound to face such issues.
I also understand that most of the time, it can be really difficult to grasp the subject of ‘Bitcoin’ because it has many angles such as computer science, maths, cryptography, economics, psychology, & sometimes philosophical too.
Having so many angles can really blur the real fact hidden behind it because we as humans have the tendency to derive conclusions earlier than needed.
However, let me help you understand some myths that you should do away with surrounding Bitcoin.
Here are 5 myths related to Bitcoin.
1. Bitcoin Is Scam & Ponzi
Ponzi Scheme Image from HYIP.COM
I don’t even remember how many times I have heard this by now. And the reasons behind these baseless arguments are mostly:
- Founder ‘Satoshi Nakamoto’ ran away
- Satoshi owns 1 million Bitcoins
- People lost money
- Wild volatility in BTC markets
- BTC is not backed by anything etc..
But people who say all these things, I’m sure, don’t understand much about decentralization, free-market economics, or intrinsic value.
Founder ‘Satoshi Nakamoto‘ gave way because he intended to keep the project totally decentralized without the involvement of any human dependency or single point of failures. And what if he owns 1 million Bitcoins! It is still better than central banks printing an unaccounted amount of fiat paper money.
And of course, people will lose money if they are gambling or trading, BTC markets are free-markets and this asset class is the most uncorrelated asset classes we have seen until now, so if you gamble and trade you will win and lose.
Lastly, the point that BTC is not backed by anything. Do we know what backs our national currencies that are annually inflated, even to 13000% inflation like Venezuela?
Sorry, but those who think BTC is not backed by anything, they are mistaken. BTC is backed by its maths, censorship resistance, and decentralization, etc.
2. Bitcoin-Only Funds Illicit Activities
OK, I agree, BTC was first used for any illegal activities and was especially involved in transactions on the silk road (marketplace) but I don’t see anything wrong with it. I will tell explain why further in this write-up.
Later it was also used by WikiLeaks, the famous whistleblower in the world when all banks stopped supporting them.
WikiLeaks now accepts anonymous Bitcoin donations on 1HB5XMLmzFVj8ALj6mfBsbifRoD4miY36v
— WikiLeaks (@wikileaks) June 14, 2011
But no one talks what happened after that, these two adoptions actually pushed Bitcoin towards mainstream adoption, when people started buying Pizzas with BTC. Why does no one question that?
When all these activities, illegal and legal, are done through fiat currencies around the world there are no voices raised, no questions asked, nor do we think of declaring fiat national currencies as a fraud that is being used for illicit purposes.
Lastly, thanks to this shoutout, I haven’t seen anyone HODLing fiat USD or EUR making such remarks 🙂
My deepest thanks to the US government, Senator McCain and Senator Lieberman for pushing Visa, MasterCard, Payal, AmEx, Mooneybookers, et al, into erecting an illegal banking blockade against @WikiLeaks starting in 2010. It caused us to invest in Bitcoin — with > 50000% return. pic.twitter.com/9i8D69yxLC
— Defend Assange Campaign (@DefendAssange) October 14, 2017
3. Bitcoin Mining Wastes Energy
Ok, let me try again and clear some dust off – Bitcoin mining is NOT a waste of energy.
Bitcoin gives you self-sovereign money, resilence, immutability in exchange for so much energy the protocol consumes and if these are small things, perhaps you might have missed the whole point, why Bitcoin was created.
Also, getting rid of proof-of-work that actually consumes a lot of energy isn’t the most intelligent solution instead we should find out better, sustainable, greener ways to satisfy the need of the Bitcoin protocol.
Some pioneers like Standard American Mining have already started implementing sustainable solutions like converting waste-to-energy for crypto mining.
Lastly, I like these two tweets by Andreas Antonopoulos that are bang on target to destroy the myth that Bitcoin mining is a waste of energy.
Um no. Immutability is not a waste of energy. Christmas lights are a waste of energy
— Andreas ☮ 🌈 ⚛ ⚖ 🌐 📡 📖 📹 🔑 🛩 (@aantonop) November 19, 2017
Bitcoin energy consumption articles:
"Madam, I'm concerned about the progress of your pregnancy. At current rate of growth, your belly will be the size of this building in just 5 years"
— Andreas ☮ 🌈 ⚛ ⚖ 🌐 📡 📖 📹 🔑 🛩 (@aantonop) December 16, 2017
4. Bitcoin Is Dead, Useless, & Supports High Fees etc.
Yeah, everyone will die one day, so what?
But even if you or I die, the protocol can run. It is so resilient, adaptable and powerful that it will survive any attack because of its self-governing and self-sustaining maths and cryptography behind it. As the difficulty might come down by then and some people might start mining it on their PCs again.
And the number of times Bitcoin obituaries have been proven wrong can be seen here.
Also, simply because the fees are high sometimes, it doesn’t make it useless.
But one should not write-off Bitcoin simply looking at its present condition and high fees as it is just a matter of time its software will develop and evolve. And it has started evolving too, now with segwit adoption increasing you are able to witness Bitcoin fees as low as 1 Satoshis/byte.
We've reached a major milestone! 🙌 $BTC tx fees are now at an ALL TIME LOW. We are now seeing transactions below 1 sat / byte for the first time ever. You can send #bitcoin for ~0.1 cents ( ~100 satoshis ) per transaction. 👇🎉 👏#bitcoinisscaling #segwit pic.twitter.com/DZy7h5yYJK
— A v B (@ArminVanBitcoin) February 22, 2018
5. Bitcoin Is Costly & I Can’t Afford A Whole BTC
Enough of this narrative, ‘Bitcoin is costly and I can’t afford it so let me pick up some cheap Ripple and Cardano etc‘ but that’s not how it should be.
If you are into cryptocurrency investments and don’t own Bitcoins, you are doing it wrong, however, it doesn’t mean, you shouldn’t buy other coins but the narrative of cheap and costly coins is simply stupid.
Many people think that they need to buy one whole BTC but that’s not the case. Bitcoin is divisible 10^-8 so you can buy a lot of Bitcoin fractions with whatever money you have.
The smallest unit is called Satoshi and you can buy many satoshis in $100-200 also. See this guide for reference to understand Bitcoin divisibility: What is Satoshi? Satoshi To BTC & USD Converters.
Keep your 50-60% money in BTC and you will not go wrong in the long term and keep it safe in hardware wallets like Ledger Nano S and don’t fall for cheap coins because it is very likely that many cheap coins might not see another day.
I recommend you to watch this short tutorial on Bitcoin’s divisibility and monetary policy.
I hope this myth-busting article on Bitcoin helps you make better decisions and have a better understanding.
Do let me know if you know of other myths surrounding Bitcoin. Share your ideas and experience in the comment section below.
Do share it with your friends & family who don’t know about it!
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An award-winning blogger with a track record of 10+ years. He has a background in both finance and technology and holds professional qualifications in Information technology.
An international speaker and author who loves blockchain and crypto world.
After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.
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