Top 7 myths to know about Bitcoin
Bitcoin, the revolutionary digital currency, was launched in 2009 by Satoshi Nakamoto. Although it has been around for more than eleven years now, there are still numerous myths about this virtual currency sprawling among the media and the public. Bitcoin is a difficult concept to grasp because it demands a basic understanding of many related topics such as economics, cryptocurrency, and computer science.
Here are the seven common Bitcoin myths that are in discussion since its inception.
1. Bitcoin is anonymous
Anonymity is the most common misconception about bitcoin, but that is not entirely true. The transactions done in bitcoin are recorded on a public ledger, unlike cash which can be viewed by anyone on a block explorer. It allows law enforcement to track down the money trails and helps in tracing activity back to people.
However, the Bitcoin owner can modify or hide his/her identity online. In other words, bitcoin is pseudo-anonymous, which means that there can be one or more than one identifiable address for each user, but it is not necessary to know who is behind those addresses.
2. Bitcoin is used for criminal activities
The structural fundamentals of cryptocurrencies could facilitate crimes mainly through money laundering from vicious activities into legitimate transactional funds. However, this does not mean that the whole web is involved with unregulated criminal cryptocurrencies. Just like all cash is not used for illegal activities, similarly not all bitcoin is funding nefarious crimes.
3. You need to purchase full Bitcoin
Another common myth is that investors are only allowed to purchase full bitcoin. The value of bitcoin can fluctuate drastically, and if you are planning to buy it for the first time, it can be a bit daunting. But the good news is that you can buy part of a bitcoin. Unlike cash, it is digital and can be divided up to 100 million pieces. You can buy a fraction of a bitcoin by just making a small investment, and obviously on the flip-side can sell it as such.
4. Bitcoin and Blockchain are the same
Many countries have their own currency, similarly, there are many different cryptocurrencies, and bitcoin is just one of them. Whereas Blockchain is a distributed database that acts as a digital ledger to record transactions. The function of Blockchain is like a bank that stores customer information and details, whereas bitcoin is pseudo-anonymous, as discussed already.
5. You cannot pay for anything with Bitcoin
Spending your bitcoin is much easier than you think. 36 percent of small businesses in the United States are already accepting Bitcoin, and in South Africa, you can pay your speeding fines using bitcoin. From paying for coffee to a haircut, all is possible with bitcoin, additionally, big companies like Microsoft and AT&T are also accepting Bitcoin. You can also use spendabit. co, a custom search engine that allows you to search for Bitcoin-accepting stores.
6. Bitcoin is not regulated
Traditionally, bitcoin is not regulated like other currencies or investments. Traditionally, bitcoin is not regulated like other currencies or investments. Bitcoin is fully open-source, decentralized, and transparent. Everything about bitcoin is available for anyone at any time, and all transactions are accessible. The payments are not done on third-party sites, and most importantly, the bitcoin system is protected by peer-reviewed cryptographic algorithms like the ones used for online banking.
7. Bitcoin can be hacked
Bitcoin uses cryptography to secure transactions and records them in the Blockchain ledger. The users and blockchain experts are constantly monitoring the system for weaknesses and repairing them to make it difficult to hack. Blockchain technology is revolutionizing the world and trying to create a safer space for investors.
If you have more questions about bitcoin, feel free to drop your queries in the comments box below.