The world of cryptocurrency is relatively new to financial markets. Bitcoin, for example, the most popular digital currency of today, was born in 2008 and after a few years it became really popular, its value increased over time and definitely attracted the attention of the whole world. And it’s just a cryptocurrency that exists among many others that is just as popular and worth as much as Bitcoin.
Today, many people and companies regularly talk about cryptocurrency, but this has not stopped the spread of some myths on the subject. Furthermore, over time, as true-false information has been disseminated, clarification is required to know what is true and what is false in this medium.
That’s why we’ve listed six myths about cryptocurrency that you need to understand. This knowledge is especially useful if you want to invest in these hot digital assets right now.
Myth # 1 – Cryptocurrencies do not work like real money
The International Monetary Fund (IMF) defines the concept of money as something valuable that can be stored, a unit of account or a medium of exchange that is widely accepted and can be translated into value. Based on this, we can say that Bitcoin, Etherium and other cryptocurrencies meet the need for money, so consider.
However, it is important to understand what cryptocurrency we are talking about and if there is support associated with it. Ballast is a physical and obvious thing that guarantees the value of a particular object. Until 1970, every dollar issued had a gold base representing that amount. Today, it no longer exists for money, but the concept remains.
Bitcoin, for example, does not support anything, but it is a widely accepted digital currency and many companies and individuals already adopt it as a form of payment for products and services. Ethereum, Ripio Coin and other cryptocurrencies are also unbacked, but they can be used in some types of trading.
Although they do not have physical equivalents, they do not have Etherium notes, for example, some cryptocurrency items can be used for buying and selling, making them considered real money.
However, this is not the case with other cryptocurrencies, such as many altcoins (alternative digital currencies to bitcoin) and memecoins (digital currency meme driven). So be careful.
Myth # 2 – Cryptocurrency is a financial bubble
Could it be that you are facing a financial bubble and you don’t know it? (Repio / Disclosure)
An economic bubble is defined as an increase in the price of an asset that is not at that particular value. In 2008, the U.S. real estate market experienced this phenomenon when simple suburban homes were being sold for as much as castles. With homes on the market being filled for sale and no buyers, real estate rapidly depreciated, leading to the 2008 financial crisis.
Bitcoin is often referred to as the “new version of Tulip Mania”, an economic bubble that occurred in the 17th century that included the value of these flowers. However, cryptocurrency differs in many ways from real estate and tulips, although this is not the case. Completely immune to this type of condition.
Although cryptocurrencies can become much more valuable than they really are and then become obsolete, some of them act like precious metals. These assets represent a completely different way of storing value, and even if the value drops drastically or is substituted for a superior asset, it is unlikely to be worthless.
In addition, the price of coins is controlled by the market itself, which helps prevent this type of problem from happening – although it is possible.
Myth # 3 – Cryptocurrency cannot be tracked
The idea of cryptocurrency is to decentralize the financial system from the big banks and institutions that control money. The goal is not to create a tool for illegal transactions and crime through digital assets, but to allow the entire network to exchange and secure the value of products and services.
The blockchain concept demonstrates how cryptocurrency transactions can be tracked. Each transaction block in digital currency contains the information of the previous block, etc. In this way, the data contained in each block is guaranteed to be true, only to be checked with the block which gave birth to it.
Therefore, every blockchain record is public and people have been arrested for committing crimes seeking ransom through Bitcoin. This is only possible because it is possible to view the transaction history of any wallet and access the exchange (the company responsible for managing the digital wallet) in which the operation was performed.
As if that weren’t enough, there’s no way to withdraw cryptocurrency anonymously. To do this, you need to use the above exchange, which acts as a kind of brokerage and will require both personal and financial information to operate.
In fact, only material money can be used truly anonymously and cannot be found in many ways. However, cryptocurrency transactions are listed on the blockchain and are public for everyone to track and analyze – the one who keeps the name secret owns the wallet.
Myth # 4 – Cryptocurrencies can disappear at any time
Solid assets like Bitcoin and Etherium will never disappear anywhere. (Repio / Disclosure)
Can you wake up and imagine all the money in your digital wallet disappearing? While this is a terrible description, it is unlikely that your bank money will disappear anywhere.
It is true that some of the digital assets of the past have indeed disappeared. However, these were cases of malicious people who took advantage of innocence – and ambition – who decided to invest in the property they were buying without even knowing it.
According to many, digital currencies do not represent traps, deceptions or scams to deceive people. As already mentioned, the true value of cryptocurrencies, such as the dollar and the euro, is that currencies are no longer supported by any physical assets.
The existence and legitimacy of some cryptocurrencies is so real that many banks and large investment companies have huge wallets with stored digital currencies. These organizations understand the value of this “digital gold” and are throwing it away because they know it’s worth it.
Myth # 5 – Cryptocurrency can be completely banned by the government
It is true that some countries have already tried to stop and ban cryptocurrency trading. However, these were attempts that failed to attack the principle behind this digital asset, which should be completely independent of the government or other regulatory bodies.
Finally, cryptocurrencies were created to operate without relying on a central system, such as a bank. Governments may bar public companies and other state entities from trading these digital currencies, but this will not restrict trade between individuals (called peer to peer, or P2P,) and between private entities. This type of ban can also lead to appreciation of the property.
Not only is a country unlikely to succeed in doing so, but it is not interesting to take such a step. In fact, some nations, such as Brazil, already recognize the value of cryptocurrencies and include them in their formal programs to declare the value of digital assets.
Myth # 6 – Cryptocurrencies are only used to commit crimes
The truth is that criminals take advantage of this innovation for their financial traps. (Repio / Disclosure)
One of the oldest and most fascinating myths about cryptocurrency is that it is used only for illegal activities. While it is true that these digital assets are involved in many crimes committed by individuals or criminal organizations, the same can be said of any type of money ever used in history.
It is true that cryptocurrencies can be used anonymously and criminals can demand values in these coins as ransom. However, as explained, transactions can be detected, which thus deter illegal activity.
As a result, recent research suggests that only 0.15% of bitcoin transactions in 2021 were related to criminal activity. In 2020, the percentage was 0.62%, and the highest rate was in 2019, when it reached 3.37%. This number is very low, indicating that cryptocurrency can be used for more activities than crime.
So the point is not that cryptocurrencies help crime – which is not even true. The problem is that criminals always try to use any available resources to benefit the people.
Where to learn more about cryptocurrency?
Repio, an ideal platform to start your journey in the cryptocurrency world. (Repio / Disclosure)
These are just some of the myths associated with cryptocurrency. There are many other lies, just find the right source of information to continue learning.
And where can we find this information and start our journey in the cryptocurrency world? Ripio is the most popular and used access platform in the world of digital assets. In addition to offering an intuitive interface and system, it provides you with a marketplace and digital wallet for managing your cryptocurrency.
Ripio lists a variety of cryptocurrencies such as Bitcoin, Etherium, USD Coin, Dye, Lightcoin. In addition, the company has its own digital currency, the Ripio Coin (RPC), an Ethereum-based community token (ERC-20). With this asset, you will not only be able to buy and sell RPCs like any other digital currency, but also reap other benefits.
Recent and trending cryptocurrency and digital assets such as non-fungible tokens (NFT), metavers and decentralized finance (DeFi) are also present on the platform.
Ripio is an ideal place for those who want to embark on their journey through cryptocurrency, offering pages full of guides and educational materials to help them learn. It is beneficial to check this and get to know Ripio better.