Cryptocurrency myths to let go of in 2023

It’s been 14 years since digital currencies as we know them today entered the financial scene. In 2009, Bitcoin emerged as the first crypto to be made available to the public, marking the birth of the cryptocurrency industry. This new asset class has had a short but eventful life, with astounding spikes and equally staggering crashes, innovative features and projects, scandals and company collapse, tech advances, and so on. 

The current crypto winter is proof of the market’s volatility and unpredictability, with prices dropping across the board over the past year. Currently, the Bitcoin price sits at $ 24,633, while the Ethereum price is $ 1,683, showing a notable improvement from the previous months. In time, individuals and organizations have become accustomed to these fluctuations and embraced digital currencies with pros and cons. 

But although digital currencies are inching closer to mainstream acceptance and people are more familiar and comfortable with using them either as a form of payment or a store of value, their novelty and complexity have given rise to all sorts of myths, rumours and misconceptions that continue to create confusion among the general population. 

It’s 2023, and the time has come to finally put these myths to rest and get a more transparent and accurate image of the crypto sphere. After all, if digital currencies represent the future of finance, as many seem to believe, getting educated on this topic is more important than ever.  So, here are some of the myths that need to be busted, in no specific order, and the facts that should replace them. 

Bitcoin and the blockchain are one and the same thing 

As the first digital currency to be invented, Bitcoin has rightfully become the face of the cryptocurrency industry. Bitcoin is the first coin that comes to mind when someone mentions cryptocurrencies, so unsurprisingly, many people have started equating the two. This association has spread further, encompassing other aspects of the industry, including the technology that underpins digital currencies – the blockchain. 

It’s, therefore, necessary to make a clear distinction between blockchain and Bitcoin or other cryptos. The blockchain is a digitally distributed public ledger that records and enables crypto transactions. Although blockchain is best known for powering cryptocurrencies, its applications go far beyond finance, being used in many other areas such as logistics, real estate, healthcare, etc. 

Digital currencies are not regulated 

Crypto has gained popularity as an alternate method of payment that is fully decentralized and can therefore circumvent government control. While this is partly true, it doesn’t mean that digital currencies are completely unregulated. In fact, the whole sector has come a long way since its early Wild West days when it went under regulators’ radars.

Over the past few years, crypto’s increasing popularity and its infamous volatility have prompted governments and regulatory bodies worldwide to develop legal frameworks for using digital assets. While these initiatives are still in their infancy, a growing number of countries have already implemented measures in this respect, and more similar actions are expected to take place in the future. 

Crypto is being used for criminal activities 

Closely related to the previous myth, many people still believe that cryptocurrencies primarily serve as a tool for illicit activities due to their decentralized nature, lack of regulation and the promise of anonymity. While there’s no denying that digital currencies have been used for criminal purposes such as money laundering, fraud, drug trafficking or cybercrime, the same can be said about fiat currencies.

Besides, even though tracing crypto transactions can be complicated, the blockchain records an entire host of data that anyone can access using the network. These data can serve as clues, pointing authorities in the right direction and helping them track criminal activity. Moreover, with growing public awareness and greater regulatory scrutiny, the crypto’s involvement in illicit activities is bound to decrease. 

Read also: 3 reasons some Nigerians still think crypto is a scam

Digital currencies are hack-proof 

Cryptos were once seen as being immune to cyberattacks, and some people still believe this to be true. The misconception probably stems from the fact that cryptos are based on blockchain technology which uses complicated cryptographic algorithms to secure transactions, ensure immutability and safeguard against double-spending.

Unfortunately, time has revealed that digital currencies are far from being Unhackable. Since 2017, hackers have been able to steal approximately $2 billion worth of cryptocurrency by taking advantage of blockchain security issues. This should serve as a wake-up call for those who think their crypto assets are 100% safe and don’t need to worry or protect themselves against cyberattacks.  

Trading or investing in crypto is the same as gambling 

Crypto is widely regarded as a speculative asset class, and for good reason. As a relatively new technology, digital currencies are highly volatile, being subjected to wild price swings and making it virtually impossible to predict trends in the market. 

However, it’s unfair to place them on an equal footing with gambling activities simply because trading or investing in digital assets is not entirely based on chance. There are mathematics, cryptography and a series of strategies behind crypto that differentiate it from games of chance. Sure, risk is also involved, but this is a common denominator for all types of investments. 

Only rich people have access to crypto

It wasn’t as easy back in the day to get hold of crypto. Users had to mine their coins or engage in direct trades with other crypto users on online forums. But as the industry evolved, the emergence of crypto exchange platforms lowered the barriers to entry and made it easier than ever for people to buy, sell or trade crypto assets.

While crypto prices have skyrocketed over time and many wealthy investors have started investing in it, digital assets can be used by anyone, including people in developing countries where the number of unbacked or underbanked consumers is still high. 

It’s normal for myths and misconceptions to circulate in a space that it’s still in the discovery space. But if you’re interested in crypto, it’s up to you to do your research and steer clear of these inaccuracies if you want to get a clear perspective of what’s going on in the crypto industry.