Myth Busters 2019 Cryptocurrency Edition: Wake Up to the 6 Bitcoin Falsehoods That Aren’t Real
Bitcoin (BTC) is the largest virtual currency in the market and it has been created more than ten years ago. There are many individuals and firms using it as a means of payment and to store funds. However, in 2018, Bitcoin has been operating in a bear trend that has affected the whole industry.
During these years, there have been several sceptics promoting FUD (fear, uncertainty and doubt) about the digital asset and virtual currencies as a whole. There are several individuals that claim that Bitcoin is a Ponzi scheme or just a scam.
However, Bitcoin is not a Ponzi scheme. These kinds of fraudulent activities require an individual profiting off of others. There are thousands of members that try to lure investors with all sort of promises. However, Bitcoin cannot be considered a Ponzi scheme because it is based on real technology that is being explored by banks, governments and other financial institutions around the world.
Moreover, there are no individuals making a profit from others in the Bitcoin space. The digital asset is just volatile and its value is based on its technology and use cases.
Another thing that these Bitcoin haters say is that the virtual currency is used mostly by criminals. But this is not in this way. Although Bitcoin could have been used and it is still used by several criminals, just one percent of these transactions are related to fraudulent activities.
Bitcoin is not anonymous and governments tend to track the blockchain trying to find illegal proceedings and transfers. According to a report of EUROPOL, cryptocurrencies to fund terrorism is just a rumor rather than a reality.
Bitcoin skeptics say that the digital currency is only for the rich. This is not like that. Users can purchase just small pieces of Bitcoin rather than just a whole BTC. Users can purchase small fractions of Bitcoin is they want to do so without having to put more than $3,500 in the digital asset to acquire one.
Is Bitcoin used only by geeks? Although it started in this way and it was used in the beginning by individuals that were involved in cryptography and financial technology, nowadays is very easy to use Bitcoin and virtual currencies.
Individuals that do not know how Bitcoin works can download an application or open an account at an exchange and start trading or receiving virtual currencies.
During December 2017, Bitcoin transactions reached new highs. That created some problems in the network. For example, to process a transaction, users could have to pay large sums of money, i.e. $55, because the network was completely congested. At the same time, transactions could take a very long time to be processed.
However, developers came out with a solution called Segregated Witness (SegWit). With it, transactions are smaller and the network is able to process a larger number of transactions per block.
Nonetheless, this is not the only solution for Bitcoin’s scalability. The Lightning Network (LN) is an off-chain scaling solution that aims at helping Bitcoin to process thousands of transactions per second. Additionally, users would have to pay just a few Satoshis for processing a transaction.
Finally, Bitcoin sceptics claim that Bitcoin is anonymous. However, Bitcoin works with pseudonymous. That means that there is an address associated with a public and private key. The public keys can be easily associated with identities provided to crypto wallet services or exchanges and other platforms.
At the same time, there are governments that are increasing the regulations in the space. That means that some nations would have to comply with KYC and AML policies and gather information from crypto users.