Since trading with cryptocurrencies represents one of the most popular options in recent years, a lot of people became interested in Bitcoin, Ethereum, and more. On the other hand, there are many misconceptions related to digital currencies. Blockchain technology is complicated, and you will have to be familiar with digital technologies to understand the processes and potential of this platform. On the other hand, you can successfully trade and earn a lot of money from trading only with basic knowledge. Visit bitpremium to read more about important things related to Bitcoin trading.
On the other side, one of the reasons why people are creating opinions that are not true is that the future of cryptocurrencies is still uncertain in many countries. We are still waiting for the implementation of various regulations that would make virtual currencies a standard way of payment. There is also a fear that they will become worthless if some countries rule them as illegal. Besides that, many misconceptions are far away from accurate facts. In this article, we are going to introduce you to the most common facts about Bitcoin that aren’t true.
1. Bitcoin is Illegal
Many people are thinking that Bitcoin and other cryptocurrencies are illegal in case that there are no regulations in their country related to them. On the other hand, some countries banned Bitcoin, and you should avoid using it in Pakistan, Bolivia, Nepal, India, and some others as well. Therefore, you should check whether Bitcoin and certain activities with it are legal in your state. When it comes to the United States, they implemented a regulation related to the legality of cryptocurrencies in 2014.
2. It Currently Has the Highest Levels of Volatility
While it is true that Bitcoin, like most other cryptocurrencies, is constantly affected by fluctuation in market prices, the fact is that it is much more stable during 2020 than many years before since it got introduced. The highest volatility was present in the first few years when it was still uncertain whether it will become popular or not. The best example of its high volatility is when the price went from under $1 to over $30 during the same day in 2011. The main reason why people are suspicious about its stability is related to its price in 2017 and a significant fall after that. In 2020, Bitcoin started raising again, and its current price is near $18,000, which is close to its highest price in 2017. Moreover, according to many experts in the financial sector, this cryptocurrency will continue to gain more value without any significant ups and downs.
3. Limitations in Mining Can Affect Its Stability
You have to know that the fact that there will be only 21 million Bitcoins when the process of mining is finished can only be an advantage when compared to other cryptocurrencies. Also, it can be divided into smaller portions, which means that you could buy something for 0.0001 BTC. Therefore, this limitation will create stability similar to those of fiat currencies that are also limited. ON the other side, blockchains that don’t include any limitations on mining might face losing value over time because there is no way to reach stability if more and more of some cryptocurrencies can be created over time.
4. Bitcoin Can Easily Become Worthless
A lot of people are suspicious of the potential of Bitcoin because it is not backed up with other assets like gold or shares. However, this platform has a stable value because millions of people are interested in using it. In that matter, with the further implementation of Bitcoin in standard payment services and even more people that have active e-wallets, its price will continue to become higher. According to some predictions from professionals, it might reach a price of $400,000 in the next 10 years.
5. There is No Possibility to Trace Transactions
One of the biggest common facts that are not true is related to potential crime funding possibility with Bitcoin that cannot be traced. We could read many stories about the possibilities to buy drugs, fund criminals, and other illegal acts by choosing to pay with Bitcoin and get away with it. However, while there is a great ability of this system to hide your data during transaction, each one can be traced to your e-wallet. The Bitcoin platform is using an open-source system to trace a record every transaction. Therefore, people should think twice before they decide to pay for something illegal with it.
6. It is Completely Safe
While blockchain technology represents an advanced service that offers much bigger security than standard banks and similar platforms, you have to know that every system could have some flaws. When it comes to cryptocurrencies, the main issue is related to online exchanges and smartphone apps for trading and storing digital assets. Developers are trying to update and improve existing services, but hackers are keeping track of these improvements as well. Therefore, you should pay attention when choosing online exchanges. There were some cases where thieves stole Bitcoins that were worth millions of dollars.
The Bottom Line
There are many advantages to using blockchain technology and Bitcoin. This cryptocurrency was introduced in 2009, during the economic recession in the world. Its main benefit is the fact that it is decentralized, which means that it cannot be affected by global monetary systems and can be a great solution for protection during an economic crisis. On the other hand, if you are interested in investing in Bitcoin, you should learn more about its features, potential, processes of storing, converting, and trading, and much more. Also, always be sure that the information you are reading is accurate because false ones might cause you to make some improper moves. For example, you have read an article from an unknown source that says how Bitcoin will become worthless and rush to sell it right away, while in reality, it can continue to gain more value. It is very important to check various sources to be sure about truthful information in the financial sector.