6 Bitcoin Myths That You Should Stop Believing

By July 13, 2020March 28th, 20224 minute read
bitcoin myths

Bitcoin (BTC) is one of the most sought after assets amongst investors. But, despite its surging popularity, news covering BTC often quote gossip and hearsay.

And due to their massive reach, people consider them as official information.

It is essential to glean facts from the fluff. BTC’s design heavily borrows from mathematics and cryptography. The protocol functions with code and calculations.

Therefore, every discussion surrounding bitcoin should be logical and rational. And that can only happen by shunning ‘myths’ and ‘rumors’.

In this article, we intend to do exactly that. So that you can see BTC for what it is, and not how it appears.

Bitcoin Has No Intrinsic Value

Naysayers say that BTC doesn’t have any intrinsic value. They also say that bitcoins just ‘appear out of thin air’.

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An asset or a currency derives value out of people’s faith, e.g: the INR. More the trust, the more is the value.

Contrary to misconceptions, a large section of people has faith in BTC. This is perfectly visible from the latest Edelman Trust Barometer Survey.

As per the report, 73 percent of Indians trust cryptocurrencies and blockchain technology.

60 percent say that the impact of crypto/blockchain will be positive. 

Crypto and Blockchain Graph
73 Percent of Indians trust cryptocurrencies and blockchain
Impact of blockchain and Cryptocurrencies
60 percent Indians think the impact of bitcoin, crypto and blockchain will be positive

Apart from this, bitcoin’s value has exponentially appreciated over the last several years. This couldn’t have happened if investors didn’t think of BTC as ‘valuable’.

Also, bitcoins don’t ‘just happen’. A process called mining creates BTC. Folks with advanced hardware compete within themselves to quickly solve complex mathematical puzzles. To know more, check out the video below:

How Bitcoin Works

Criminals Use BTC

Some believe that bitcoin transactions are anonymous. And that makes BTC a suitable vehicle for all sorts of illegal activities.

Bitcoin operates on a blockchain-based protocol. It is a decentralized public ledger that records all BTC transactions. What this means is that all activities are openly visible to everyone.

An alphanumeric address masks the details of transacting parties. But, everything else like the transaction value, date, time is completely accessible.

That makes bitcoin ‘pseudo-anonymous’. As opposed to ‘pro-criminal’ claims, this feature helps law-enforcement authorities in nabbing felons. See the below video to know more:

How Bitcoin Can Help Track Down Criminals

Bitcoin Was Hacked

No, that’s not true. If Bitcoin was hacked, it wouldn’t have gained the trust of millions of investors across the country.

Hacking Bitcoin is near impossible. Because of its blockchain.

A ’51 percent attack’ could help gain control of the Bitcoin network. But, going by how much the ecosystem has matured, a 51 percent attack will be a very costly proposition. How costly?

According to data, it would cost almost USD 500,000 an hour to carry it out. No hacker would shell out that kind of money. Plus the chances of breaking in are minuscule to zero.

It’s a Ponzi Scheme

Normally a Ponzi scheme has a hierarchical arrangement with a boss at the top. The person who starts it all. Investors are guaranteed fixed returns on their capital but the underlying mechanism is fraudulent.

Although Satoshi Nakamoto created Bitcoin in 2009, he remains unknown. He/She designed the network so that anyone can participate and either contribute to its growth or just invest in BTC.

No central authority controls Bitcoin. There are no ‘middlemen’ facilitating transfers. And it will continue to remain that way in the foreseeable future.

BTC Investment is Costly

A lot of people, especially in India don’t buy bitcoin because they think it’s costly. They think they have to buy one whole BTC. Going by the ongoing market rates they bow out.

Here’s the fact. Despite rumors of a ‘highly-priced investment’, anyone can buy bitcoin. Why? Because 1 BTC is divisible into 100 million parts. That’s right. Because of its divisibility, investors can buy fractions of bitcoin.

It is not at all necessary to buy 1 full BTC.

Only Technically Proficient People Can Use It

This was said about the internet and email too. Initially, nobody understood how these two technologies would be utilized in the real world. But eventually, both have become widely popular and now life is very difficult to imagine without the two.

This holds for bitcoin too. There is a learning curve involved but it’s not rocket science. We at WazirX have put together an intuitive interface in place so that using BTC becomes a seamless experience.

See the below video to know how to use the WazirX phone app in detail:

These were a few bitcoin myths, but there are many more. BTC and the cryptocurrency ecosystem is paving the way for a bright future. To become a part of this future, you need to question everything that you come across, even hard facts. Only by ‘verifying’ and not blindly trusting, you can truly contribute to Bitcoin’s growth.

Further Reading:

5 Ripple (XRP) Myths you Should Stop Believing

5 Myths About Ethereum

How Does Bitcoin Work?

The blockchain, a distributed digital ledger, is what Bitcoin is based on. As the name suggests, blockchain is a linked database made up of blocks that store information about each transaction, such as the date and time, total amount, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological order to form a digital blockchain. Entries are linked in chronological order to form a digital blockchain. Blockchain is decentralized, which means any central authority does not control it.

How Bitcoin Mining Works?

Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."

What Type Of Currency Is Bitcoin?

Bitcoin is a type of digital currency or cryptocurrency. In January 2009, Bitcoin was established. It's based on Satoshi Nakamoto's ideas, which he laid out in a whitepaper. The name of the individual or people who invented the technology remains unknown.

Is Bitcoin Mining Free?

Bitcoin mining isn't free, but it can be tried on a budget. Bitcoin mining is an essential part of the blockchain ledger's upkeep and development and the act of issuing new Bitcoins. It is accomplished by the use of cutting-edge computers that tackle complicated computational arithmetic problems. The effort of auditor miners is rewarded. They're in charge of ensuring that Bitcoin transactions go off without a fuss and that they're legal.

How Many Bitcoins Are There?

There are 18,730,931.25 Bitcoins in circulation as of June 2021. The total number of Bitcoins that would ever be there is just 21 million. On average, 144 blocks are mined every day, with 6.25 Bitcoins per block. The average number of new Bitcoins mined every day is 900, calculated by multiplying 144 by 6.25.

Is Bitcoin And Cryptocurrency The Same Thing?

Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.

What Are The Chances Of Bitcoin Crashing?

Two Yale University economists (Yukun Liu and Aleh Tsyvinski) produced research titled "Risks and Returns of Cryptocurrency" in 2018. They looked at the possibility of Bitcoin crashing to zero in a single day. The authors discovered that the chances of an undefined tragedy crashing Bitcoin to zero ranged from 0 percent to 1.3 percent and was around 0.4 percent at the time of publishing, using Bitcoin's history returns to determine its risk-neutral disaster probability. Others claim that because Bitcoin has no intrinsic value, it will inevitably crash to zero. On the other hand, Bitcoin advocates argue that the currency is backed by customer confidence and mathematics.

What Is Meant By Bitcoin?

Bitcoin is a digital currency that was initially released in January 2009. It is based on ideas offered by Satoshi Nakamoto, a mysterious and pseudonymous figure, in a whitepaper. The name of the person or individuals who invented technology has not been revealed. Bitcoin promises lower transaction fees than other online payment systems, and unlike government-issued currencies, it is decentralized.

How To Make Bitcoin?

Bitcoin mining is not just the process of putting new Bitcoins into circulation, but it is also an essential part of the blockchain ledger's upkeep and development. It is carried out with the assistance of highly advanced computers that answer challenging computational math problems. Miners are rewarded for their efforts as auditors. They are in charge of ensuring that Bitcoin transactions are legitimate. Satoshi Nakamoto, who is the founder of Bitcoin, innovated this standard for keeping Bitcoin users ethical. Miners help to prevent the "double-spending problem" by confirming transactions.

Can Bitcoin Be Converted To Real Money?

Crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer Peer Transactions are all options for converting Bitcoin to cash. This can be accomplished by using Bitcoin exchanges such as WazirX. A Bitcoin ATM is a real place where you may purchase and sell Bitcoins with cash, unlike standard ATMs that allow you to withdraw money from your bank account. Many websites provide the option of purchasing Bitcoin in return for a prepaid debit card that works similarly to a standard debit card. Through a peer-to-peer marketplace, you may sell Bitcoin for cash faster and more privately.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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