Monday, August 20, 2018
Tech

Debunked: Top 5 Bitcoin Myths and Misconceptions | AIB

Bitcoin has been around for quite a while now, but many people still do not know what it is and what it stands for, yet Bitcoin is frequently discussed, and due to confusion, certain misconceptions about the cryptocurrency have arisen. These are five things that many people think of Bitcoin, but that is not quite right.

Bitcoin is bad for the environment!

You often read that Bitcoin is bad for the environment. There is some truth in that, but the reality is not so black and white. To minimize the coins, a lot of energy is used, which is usually not renewable energy.

This indeed causes quite a bit of pollution, which makes it understandable that Bitcoin is linked to environmental pollution. However, it is not the cryptocurrency itself that is bad for the environment. Mining could also be done with renewable energy, which could make Bitcoin even less polluting than, for example, banks with their huge server rooms, which also consume quite a bit of energy.

Bitcoin

It is too expensive to invest in!

Another view of Bitcoin is that it is nowadays far too expensive to invest. Many people think that when you buy bitcoins, you also purchase whole coins right away. However, you do not have to buy an entire coin of (at the moment) around 7 thousand dollars. You can also invest in parts of a coin.

A bitcoin can be divided into 100 million satoshis, which is the smallest Bitcoin unit. So if you have 50 USD that you can miss, you can buy 50 USD of bitcoins.

A thousand people own 40 percent of the coins!

Something you often hear is that 40 percent of the bitcoins are in the hands of a thousand people. However, this statement is based on the wrong source. You cannot figure out how many people own bitcoins, but you can only find out how many wallets there are and how many bitcoins there are in these wallets.

However, a wallet does not have to belong to a single person. For example, the two greatest purses of the exchanges are Bitfinex and Bittrex. These two wallets do not contain the bitcoins of two people but quite a few people. On the other hand, it is also possible that one person can keep several wallets. Therefore it is not possible to conclude how many percents of the coins are in the hands of an x โ€‹โ€‹number of people.

Bitcoin

Transactions are slow and expensive!

What is often used as a negative point concerning Bitcoin is the fact that transactions take a long time and are relatively expensive. Lately, this is true, but that is not something inherent to Bitcoin. Because many people started using the cryptocurrency, the network has become relatively overloaded. To get priority with transactions, higher transaction costs are indeed also charged.

However, it is not that Bitcoin is expensive and slow by default. At the beginning that was not the case and there are solutions on the horizon to change this again. The Lightning Network, among other things, could relieve the network, reducing transaction costs and increasing speed.

Bitcoin is for illegal activities!

Many people also think that Bitcoins are mainly used for illegal transactions. Because it is easier to perform operations anonymously than through a bank, it is indeed true that criminals find the cryptocurrency a subtle way to pay.

However, it is not one big underground organization. Many “normal” people also use the cryptocurrency, and in many places, it is just a legal way to pay for things. By using Bitcoin, you are not suddenly associated with crime, and you do not end up in a dubious world.

Incidentally, it is true that many people on the dark web use Bitcoin for their transactions. However, Litecoin and Dash have become more interesting for dark web users.

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Harish Reddy
โœ’ Writer/Contributor, Gamer ๐ŸŽฎ and Technology Enthusiast ๐Ÿ“ฑ Co-founder @AIndiaBlog! ๐Ÿ‘‘ #AIB ๐Ÿ“ #HalaMadrid โšฝ #AllIndiaBlogging ๐Ÿ’• #Blogger ๐Ÿ’ซ