Since the Bitcoin (BTC) whitepaper was published in 2009, the cryptocurrency sector has grown rapidly, but occasional setbacks and persistent myths have deterred investors and slowed growth.
With this in mind, Finbold has compiled several of today’s most common digital asset myths and the facts and details that dispel them.
Cryptocurrencies are used in illegal activities and fund criminal organizations, but this is not their sole purpose.
According to Chainalysis’ mid-year crypto crime report from August 2022, cryptocurrency scam revenue had dropped 65%. All money has been used in crime since its creation.
While some digital assets are doomed to fail, many have value, even if their value fluctuates. After its 2009 launch, Bitcoin was worth a few cents, but in late 2021, it reached a record $69,000.
However, cryptos like Cardano (ADA), Ethereum (ETH), and Polygon (MATIC) have value in their usability and potential, as well as in their financial gain from selling them. Individual perceptions of “value” determine everything.
Many skeptics believe digital assets are a fad and that fiat money will soon outperform them. Crypto has survived 13 years of active bans, including in China.
Other countries are experimenting with central bank digital currencies (CBDCs) and have even made Bitcoin legal tender, like El Salvador and the Central African Republic (CAR).
Since their popularity has grown, Proof-of-Work (PoW) cryptos like Bitcoin consume a lot of energy, but critics overestimate the impact. In 2022, BTC contributed 0.1% of global greenhouse gas emissions.
Proof-of-stake (PoS) assets like Ethereum (ETH), Cardano (ADA), and EOS (EOS) validate block transactions instead of mining, requiring less energy.
Trust is hard to come by when crypto companies fail and their CEOs are arrested and prosecuted. Like the stock market, dishonest people will run some companies.
However, anyone investing in crypto must do their own research, study the digital asset and crypto markets, and then choose one to trust.
Experts recommend stockpiling during bear markets and market bottoms, but beginners can start investing in crypto at any time.
For instance, a newbie should buy Bitcoin when its market capitalization is 0.1% of global wealth and its price is below $17,000 rather than when it was trading at nearly $70,000.
As one becomes an expert, one can navigate the cryptocurrency landscape and decide when to buy or sell digital assets.