Since cryptocurrencies are pretty new and many people have not had a chance to use them yet, there are a lot of myths that have sprung up about these currencies. People often don’t understand how they work, so they are worried that the cryptocurrency may not be safe, may be a scam, or that something else may be wrong with them. we will go through some of the cryptocurrency myths to give you a better understanding of how these currencies work.
1. It’s Not Backed By Gold or Silver – So It’s No Good.
One thing that makes some people nervous about using cryptocurrencies is that there is no physical material that backs it up. With traditional currencies, you have the backing of silver and gold, or the government’s promise and backing. While it doesn’t work this way in practice, in theory, you could take some of your money to the bank and get a certain amount of gold or silver back in the process. But Bitcoin and the other cryptocurrencies are not designed to work this way.
Instead, these cryptocurrencies are designed through code. The code will state how much they are worth and in many cases, there are only so many of each coin available to use. For example, Bitcoin was designed with just 21 million coins available, but many of them have not been mined yet and are still not in use. This helps to keep the currency stable without needing the backing of anything else.
2. Only criminals use it
Yes, there are some criminals who do work with cryptocurrencies. They like the fact that they can remain anonymous on the network and conduct their activities with a limited chance of someone being able to tell it is them. They will avoid taxes, money launder, and even sell items that are considered illegal, whether those items are illegal in their country or in the country they are sending the items to. The system is set up to help make things a bit easier for criminals to get away with these things.
But, for the most part, those who are on these networks are there because they want to use the cryptocurrency for legitimate purchases. They like all the features and the ability to make more purchases throughout the world than they were ever able to do before. And most people are doing it all legally, purchasing products that they are allowed to use in their countries and claiming the money they make in taxes. While some criminals may be on these networks, most of the people who are there are law-abiding citizens.
3. A Government Agency Controls It
We are used to working with money that has some kind of government control over it. This is the way that we have dealt with money in the past and we know that it is backed by gold and silver and the word of our government. This is not true with Bitcoin and all of the other cryptocurrencies, although there are a few governments who are trying to develop their own version to use in their countries.
The fact that a government agency is not controlling Bitcoin and Ethereum and all the options is one of the main benefits that people enjoy when they are working with cryptocurrency. They are tired of a bank or a government agency deciding the inflation rates or how much their money’s worth at the end of the day. They like that freedom, the freedom of being able to earn and send money without having Big Brother there messing around with things.
4. It Is a Scam
Cryptocurrencies are brand new and this can sometimes make them a bit scary and misunderstood by those who are not familiar with them. They are located only online, with no paper counterparts for you to use. They aren’t controlled by a government agency, just computer code. They allow you to remain anonymous, rather than having all your personal information stored where any hacker can get ahold of it. It can be used for purchases all around the world, without having to worry about it taking too long for the payment to go through or the high transaction fees.
All of this is stuff that we just aren’t used to when it comes to our money and some people believe that it is too good to be true. But in fact, cryptocurrency is able to deliver on all its promises and more, making it the perfect choice to use. There are still going to be some that believe that it is a scam, but it is actually a safer way to make and receive payments than anything you have used in the past. And if you ever decide that you don’t want to work with the cryptocurrency again, you can always exchange it back out for the fiat money that you want.
5. Cryptocurrencies Can’t Be Hacked
This is a common misconception. It is possible for all cryptocurrencies to be hacked. These cryptocurrencies are designed with the help of a code so as long as the hacker is able to get on the network and use the code how they want, it is possible for them to hack the cryptocurrency. But there are some safeguards in place that help keep the network a bit safer than what you find with traditional currencies.
First, the mining process can help to keep information about your transactions safe. The codes that go on the blockchain are set up so that if someone messes with even one number or letter in the code, it is going to mess with everything else, making it impossible to go undetected. You can also choose to work with e-wallets that provide extra protection and security to make sure that your information is not being hacked.
Sometimes it is best if you choose to use cold storage to hold onto your currency, especially if you are not using it all that often. This allows you to keep the currency off the computer so a hacker is not able to take it and use it how they want when you aren’t around.
6. Transactions in Cryptocurrency Are Untraceable
Many people think that it is impossible to trace cryptocurrencies, but this is not true. There are ways to remain pretty anonymous on the network and keep your information safe, but the cryptocurrencies themselves can be traced. Remember that Bitcoin and the other networks want to make sure that they are transparent because this helps to build trust between them and the users so making it impossible to trace the currency at all can make this goal hard.
All of the currencies that you use are going to be traceable. They all have histories on them, which is why some people want to switch them out to make sure transactions are not traced back to them. The ledger system with blockchain will also keep track of transactions that occur on the network, which also helps to trace the currency.
7. Merchants Won’t Accept Cryptocurrency
There is a little bit of truth in this one, but it is not as bad as some people think. You may not be able to go into every traditional merchant in the country and make a purchase, but you may be surprised at how many already accept Bitcoin and other cryptocurrencies as a form of payment. Think of it like a specialty credit card, like MasterCard. Not every merchant you go to is going to accept it, but there are plenty of options that do
When these cryptocurrencies first began, there were only a handful of merchants who were willing to accept these currencies at all. It was a new idea and one that many were not that familiar with to start. But now that Bitcoin and some of the other cryptocurrencies are starting to grow, it seems like more merchants are jumping on board as well.
There are several ways that you can purchase items through many merchants with the help of Bitcoin. The first option is to look through the Bitcoin (or whatever cryptocurrency you want to use) and see what merchants are available on that network. There are some popular merchants that already work through these networks and you are able to make your purchases without a lot of hassle.
There are also a few merchants that you can use cryptocurrencies with but they aren’t available online. They can use special machines that will scan your QR code in a store and take the Bitcoin out of your wallet. These are growing in popularity with some of those companies who want to reach out to the cryptocurrency crowd but who haven’t found ways to be online or on the right network yet.
You will find that there are ways around the stores that don’t accept cryptocurrency as a payment right now. For example, Amazon doesn’t accept these kinds of currencies. But you can take your Bitcoin and other cryptocurrencies, purchase some gift cards and then use those to purchase items on Amazon. This may not be the most direct method, but it helps you to open up even more merchants to work with.
