Although the bitcoin market has grown significantly over the last decade, the absorption rate of cryptocurrencies worldwide is still very low. Despite the numerous benefits and great potential of digital currencies compared to fiat money, most people in the world are still not willing to give them a try.
Close to 60% of internet users are aware of bitcoin but only less than 5% of the world population actively use cryptocurrencies. Why is this the case? Why aren’t more people willing to adopt cryptocurrencies?
While there are many reasons why the majority of the world population doesn’t want to give cryptocurrencies a try, wrong beliefs and misconceptions about cryptos play a big role. Some of these myths are a result of a lack of sufficient information on cryptocurrencies while others are plain lies and propaganda against cryptocurrencies. We’ve taken time to research the top 3 misconceptions about cryptocurrencies and provided refutations to them.
Myth #1: Cryptocurrencies Have No Intrinsic Value
Early in 2020, Warren Buffet claimed that cryptocurrencies offer nothing as they have no intrinsic value. According to Warren, one of the richest men on earth, bitcoin doesn’t have a place in the modern world as it doesn’t offer a unique solution to modern-day financial problems. For that reason, he claimed that he will never own any cryptocurrency.
Warren’s position on cryptocurrencies is a reflection of what billions across the world think about bitcoin. Many people believe that cryptocurrencies don’t qualify as international currencies which is just a misguided belief.
Refutation: Cryptocurrencies Have Intrinsic Value
Cryptocurrencies qualify as international currencies. Here are some attributes of cryptocurrencies like bitcoin which qualify them as a form of currency.
- Cryptocurrencies are scarce – Digital coins like bitcoin have a limited supply. The limited supply gives bitcoin value as there will always be demand for the currency. The scarcity also means that the market will never be inflated or manipulated by central bodies.
- Interchangeability – Thanks to crypto exchanges, one can trade one cryptocurrency for another or trade it against fiat currencies.
- Divisibility – An international currency should be able to be broken down into small portions for convenience. You can break cryptocurrencies into very small fractions to the tune of less than 1/10000th of a single unit. This makes them accessible to everyone.
- Longevity – Cryptocurrencies exist on decentralized blockchain networks that are here to stay. They will always exist and there is no way to destroy them or make them disappear.
- Transferability – Cryptocurrencies are transferable. All the cryptocurrencies have a form of token which can be transferred from one account to the other.
- Global Acceptability – Businesses all across the world are incorporating bitcoin as a form of payment. Irrespective of where in the world you are, you will always find somewhere to spend your cryptocurrency and if not, you can quickly convert it to the currency of your choice.
Myth #2: Cryptocurrency Is A Bubble Bound To Burst
The other reason why very many people are reluctant to invest in cryptocurrencies or use them in their daily lives is the belief that cryptocurrencies are just a bubble bound to burst soon. One of the reasons behind this opinion is the volatility of cryptocurrencies.
Cryptocurrencies can have a steep gain in value one day and plummet the next day. This makes a lot of people believe that cryptocurrencies are only here for a short period before the bubble bursts rendering them useless.
Refutation: Cryptocurrencies Are Here To Stay
If you are waiting for the cryptocurrency bubble to burst, you should expect an endless wait. Cryptocurrencies are here to stay and the bubble is not bursting any time soon. And if the bubble was to burst anyway, it would be a good thing for cryptocurrencies.
Assuming the crypto bubble were to burst, it would reveal the real intrinsic value of cryptocurrencies and only the players who are genuinely interested in the currencies would still hold on to their assets. Players without strong value propositions would stop hogging cryptocurrencies improving the circulation in the market. This would be a good thing for cryptocurrencies and would help them grow even more.
Myth #3: Cryptocurrencies Give Criminals Anonymity
There is a general belief that cryptocurrencies are criminals’ money. The term anonymous is carelessly thrown around when mentioning cryptocurrencies and this has left many people believing that criminals can get away with financial crimes by simply converting their proceeds into cryptocurrencies.
A lot of people believe that bitcoin transactions are untraceable. This makes them stay away from the coins as they could implicate themselves in crime without their knowledge.
Is this true? Are cryptocurrency transactions completely untraceable as many people believe them to be?
Refutation: Cryptocurrencies Are Pseudonymous
Although you don’t have to provide your details when registering for a bitcoin wallet, it is not impossible to link a wallet address to a user. Also, all legacy crypto exchanges like CEX.IO have a person verification process so everyone who wants to use exchanges should provide information. It is also worth noting that all transactions involving cryptocurrencies are stored on the blockchain.
This means that authorities can trace suspicious transactions and nab criminals using cryptocurrencies to advance their crimes. The process might be more tedious than it is with the traditional banking system but the result is the bad players end up behind bars.
For years, criminals have been using fiat currencies to launder money and advance their crimes but this has never stopped us from using the currencies in our businesses. We equally should not be scared to use cryptocurrencies just because of a few rotten apples within the industry.
There is more to cryptocurrencies than all the misconceptions and myths. Cryptocurrencies have great potential of changing the world but misconceptions and misguided beliefs are holding many people back. There is a need to educate the masses on the real value of cryptocurrencies and why they are the future of the world. The world deserves liberation from all forms of centralization and cryptocurrencies can help us achieve this.