• Wed. May 29th, 2024

Common Myth and Misconceptions about Crypto


There is no denying that crypto has really taken off over the past few years. There are now approximately 19,00 cryptocurrencies in existence. 

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If you are thinking about investing in cryptocurrency, it is important to make sure you do your research first. As cryptocurrency has become more and more popular, this naturally has resulted in a lot of misinformation being spread. It is vital to separate the facts from the fiction.

With that being said, below we are going to take you through some of the most common myths and misconceptions about crypto. The last thing anyone wants to do is make a decision based on false information!

  1. Buying crypto is a difficult and long-winded process

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A lot of people believe that purchasing cryptocurrency is difficult and long-winded. They hear words like “exchanges” and “wallets” and they assume that the whole process is going to be a complicated one.

This could not be further from the truth. You can even buy bitcoin with a credit card on Moonpay and other platforms like this. This means it is just as simple as making any other purchase on the Internet.

  1. All cryptocurrencies platforms are the same

Another myth that we see is that the crypto market is filled with cryptocurrencies that are pretty much all the same sort of thing. Again, this is a huge misconception!

There are around 300 million crypto users worldwide and over 19,000 cryptocurrencies. The term ‘cryptocurrency’ is used to describe a broad assortment of coins, networks, and systems. These cryptocurrencies can be considerably different from one another in many areas, including volatility level, ownership structures, and properties.

One of the main misconceptions in the mainstream media, which comes as a consequence of common misunderstandings, is that crypto and Bitcoin are one and the same. This could not be further from the truth.

Bitcoin is simply one form of crypto. It has been around for many years now. However, for the wider crypto market, it is still very much in the early days. To put this into perspective, the other cryptocurrencies out there are pretty much all start-ups, and investors need to treat them in this manner. 

Before you make an investment in any type of cryptocurrency, it is vital to look at the industry landscape and make sure you have a clear comprehension of it. Research into the founders of the coin and their background, as well as the experience they have in the sector and any past projects they have worked on. 

  1. Cryptocurrency is used for dark and illicit reasons

For those who have done little to no research into cryptocurrency, there can be the belief that these coins have been designed to be anonymous so that they can be utilized mainly for dark, nefarious, and illicit purposes. Again, this is not the case. 

While there was a time whereby it was being used on the dark web by early adopters, this is like saying that the mobile phone system is corrupt because around one percent of people use it for criminal reasons. 

People wrongly assume that crypto is anonymous and, therefore, it is an excellent way of stashing your wealth. However, everything on the blockchain is transparent and open. 

  1. Cryptocurrencies are a fad

At one time, email, the Internet, and computers were only deemed interesting to a very small fan of technology fans. Today, they are staples in modern work and personal life.

It is difficult to determine where cryptocurrencies are going to be in the next 20 to 30 years. Nevertheless, the technology that has been implemented and the products they inspired are going to keep on being developed and refined. 

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We are seeing decentralized finance applications take shape, with consumers and financial institutions growing increasingly interested in these areas.

Some companies are investing heavily in altcoins, and governments are looking for ways to introduce legally-recognized cryptocurrencies pegged to an asset that is more stable in price.

Giants in the tech industry are looking for ways of fusing digital and real worlds, utilizing blockchain technology as a building block for this, with the generation of NFTs for anything you can possibly imagine. Tokens can be made for any asset and value given to them, meaning real and virtual worlds are merging more and more, and we are likely to see crypto coins involved in this.

  1. Cryptocurrencies are a scam

Another myth we see a lot of people declare is that cryptocurrency is nothing more than a massive scam. However, cryptocurrencies have now become an accepted exchange means by many merchants and retailers. 

People are accepting cryptocurrency for personal transactions. Moreover, governments around the world are looking for ways to regulate cryptocurrency. 

The majority of cryptocurrencies have no malicious artificial intent, code, or programming that works to take money from you.

Nevertheless, this does not mean that crypto-based scams have not been created. Some hackers and criminals have created scams to try and trick people into parting with their cryptocurrency or money.

For instance, we have seen a lot of initial coin offerings that have ended up being scams, i.e. unregulated fundraising for ‘new’ cryptocurrency ventures. 

In other kinds of scams, you may find that someone calls you presenting to be an official for the government and asks you to pay debts using cryptocurrency or you may be asked to accept an unverified transaction. 

While these scams are unfortunate, it is important to realize that they are not unique to cryptocurrency. Data breaches and identity fraud rates are high at the moment, and hackers view cryptocurrency as another way they can get their foot through the door and steal someone’s confidential information.

  1. Cryptocurrencies are not safe or secure

Last but not least, let’s end with one of the most common misconceptions of them all. As is the case with most things in life, there are secure ways of handling cryptocurrencies and there are ways that are not very secure. It is simply about the choices you make.

Blockchain is the main technology behind these coins. For those who are unaware, a blockchain is a distributed database that is secured using encryption technology and techniques that is very tough to break.

As transactions enter into the blocks on the blockchain, prior transaction data is recorded in the new blocks and then it is encrypted.

The chain keeps on building on each previous block, and a community of automated verifiers will need to agree on the validity of the information recorded in the transactions. 

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The use of consensus mechanisms, link blocks, and encryption means that it is virtually impossible to alter data in the blockchain so you can ‘steal’ cryptocurrency.

However, there are some weaknesses that you do need to be aware of. The main weakness lies in how you access and store cryptocurrency. For example, the centralized exchanges that facilitate crypto transactions and the crypto wallets you use.

It is, therefore, completely possible that software and platforms like this can be tampered with or hacked – just in the same way that any other platform could be hacked, for example, your online banking. 

At the same time, it is completely possible that you can send and store transactions safely without needing to worry about this.

You simply need to make sure you are using the most secure and effective methods when it comes to storing your cryptocurrency. For example, you could use a cold storage solution to keep your crypto asset keys away from the exchanges. 

Whenever you want to use your cryptocurrency, simply transfer the exact amount you want to use, meaning you only use a hot wallet whenever you need to use your crypto. Make sure that you transfer the money via a wired and secure connection on a non-mobile device, for example, your personal computer. 

Ultimately, this shows why it is imperative to make sure you are educated and knowledgeable about cryptocurrency before you dive right in and make an investment. You play the main role when it comes to making sure that your crypto coins are handled, stored, and transferred in the safest possible manner.

Don’t believe the myths and misconceptions about crypto 

So there you have it: some of the most common myths and misconceptions about crypto. We hope that this has given you a better understanding of some of the most common pieces of false information out there about cryptocurrency. 

As is the case with any type of investment, you should always do your research first to make sure that any decision you make is based on pure facts rather than rumors or speculation. 

Of course, we must stress that there are no guarantees with any sort of investment, so you should never put more money in than you can afford to lose.

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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.