Do you remember the time you first started trading the Bitcoin? After you have been trading for many years, it is easy to forget the confusion, roadblocks, and dilemmas that you faced as a newbie. A beginner is likely to be overwhelmed with new terms like blockchain or private keys, and he may not be able to get enough clarity about certain Bitcoin facts. Here are some of the common Bitcoin myths that you should clarify for a newcomer:
- To start with, as a newcomer, you are told that the Bitcoin is completely anonymous. But the real truth is that neither the Bitcoin or BTC nor the Bitcoin Cash or BCH that emerged in 2017 out of a hard fork are anonymous. It is possible to see all Bitcoin transactions using any analysis software or block explorer tool. The advantage that Bitcoin transactions give is immutability, which means that once records are verified and added to the blockchain, they cannot be tampered with. In Bitcoins, you will not find the identities of the sender or recipient; you can however see the Bitcoin address and know the amount involved in a transaction.
- The Bitcoin is based on thin air, as US President Trump had argued. This myth is challenged by the fact that any economic entity is actually based on speculations. Value is always subjective and the market is free to add value to what it wants and how it wants. Bitcoin’s faster transactions, lower transaction fees, and decentralization have made people give it value. Unlike traditional money that is issued by governments, there is no devaluation in Bitcoins because Bitcoin has a finite supply of 21 million coins.
- It was believed that the blockchain and Bitcoin are one and the same. But the blockchain is actually a public ledger which contains data blocks that are secured by miners. The miners use intensive computing power to solve complex cryptographic problems to verify the transactions. In exchange the miners are given Bitcoins as rewards. So, the Bitcoin is a digital currency which is founded on the blockchain; it is not the same as the blockchain.
- It was widely held that Bitcoins can only serve the ill-intentions of criminals. But the truth is that Bitcoins are now being accepted by many reputed retailers and notorious activities have been stopped by authorities as happened in the Silk Road incident.
- The Bitcoin will not make you into a billionaire overnight even though the myth is that it is like a get-rich-quick scheme. The crypto world is filled with snake oil scams and other schemes alright, but real value has been made by Bitcoin holders. There is no scam involved because the Bitcoin is actually a decentralized network comprising developers, users, miners, and nodes. Scam networks have definitely tried to use the network to their advantages but Bitcoin as a currency has no connections with them.
- People felt that the Bitcoin was only meant for the tech-savvy; but the truth is that anyone can trade Bitcoins downloading easy-to-use wallets and signing up on exchanges. You can send or receive the coins simply by copy-pasting addresses or scanning QR codes. Visit https://kryptoszene.de/bitcoin-robot/bitcoin-superstar/ for more details about automated bitcoin trading.
- Bitcoin does not stand for any centralized organization; it is not similar to a company as PayPal. It is a currency and a network which is decentralized and runs on nodes. It is secured by independent users worldwide who mine blocks and make transactions. Anyone doubting the structure can audit this pen source code right away because nothing is a secret. Moreover, no data can be tampered with.