The so-called cryptocurrencies are a reality and there is no denying that they are revolutionizing the financial market. We have seen a lot of growth in the market in the last few years. However, with popularity comes doubts. News like “Bitcoin is illegal”, “Bitcoin is a fraud” or “Cryptocurrency has no support” has many investors afraid to invest in digital currencies. And now, what to do?
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Investor Macon Santos is an expert in cryptocurrency and clarifies ten main myths about bitcoin, the main cryptocurrency in the market:
1) Is bitcoin 100% anonymous?
Myth. This doubt is common among most investors entering the crypto market. Blockchain network which is completely public. That is, any transaction that occurs on the blockchain network can be viewed and traced on the Internet. However, users cannot be identified on the network with their data. As is the case with banks. Like banks, every transaction on a blockchain is done under a pseudonym called the public key.
This key is the user's bitcoin wallet address. In the blockchain logbook, the transactions 17SkEw2md5avVNyYgj6RiXuQKNwkXaxFyQ to 13TETb2WMr58mexBaNq1jmXV1J7Abk2tE2 are recorded. But this transaction can still be tied to an individual when there are wallet exchanges that validate their users. Therefore, in most transactions, wallet owners cannot be directly identified, but all transactions on the network can be publicly viewed.
2) Is bitcoin illegal?
Myth. In most countries around the world, buying and selling bitcoin is 100% legal, with some countries even regulating its use.
3) Are bitcoin transactions irreversible?
truth. It is very important that you pay close attention and be careful while transferring bitcoins. In the cryptocurrency market, once a transaction is linked to a block and inserted into the blockchain, it becomes irreversible.
4) Is bitcoin a pyramid?
Myth. Bitcoin is a cryptographic and unique asset that has gained value over the years due to great demand from people and companies interested in using its technology. Bitcoin has nothing to do with the financial pyramid scheme.
This confusion can often be created as people use bitcoin to invest in illegal fundraising schemes that promise fixed returns well above the market average.
What happens is that these schemes do not have a legal authority to operate and become volatile within a few months of life, causing losses to most of their investors.
Before bitcoin, currencies such as the reais and dollar were also and continue to be used by scammers. This suggests that the problem is not with bitcoin itself, but with the fraudulent model that can be easily identified by the promise of high monthly returns.
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5) Is bitcoin an asset that resembles gold in recent decades?
truth. After a little search it's easy to see that it is. Bitcoin is the most gold-like asset ever created by man. Due to its scarcity and usefulness, bitcoin is currently in high demand as a store of value. Apart from being much better than gold in all the properties like portability, divisibility and variability, bitcoin is even better than gold in its scarcity. While gold is rare, bitcoin is limited and has only 21 million units.
6) Can we buy things already in commerce with bitcoin?
truth. It is currently possible to use bitcoin to make purchases at establishments around the world. And if it is not possible to buy directly with bitcoins, you can go to an ATM to withdraw in the local currency.
7) Bitcoin makes money laundering possible?
Myth. This question is often asked by people who do not understand about money laundering. Money laundering means converting illegally earned money into something legal. It is known by the expression you may have heard of: "warming cold money". In other words, you make money from crimes, but you say you earned it by selling clothes, for example. You have no way of saying that you have earned bitcoins from heaven, you need to buy them, and for that you have to have legitimate money and you have to declare who you bought these bitcoins from. For example, you can also mine them or increase bitcoin trading volume. But any professional you investigate can easily identify whether you have tried to commit fraud. In other words, there is no money laundering facility.
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8) What enables bitcoin assets to be hidden?
9) Is mining very profitable?
Myth. Gone are the days when mining Bitcoins was simple and very profitable. Currently, the high costs of infrastructure and electricity consumption make mining unfeasible in most cases. Only large corporations manage to keep their operations running and even so, with the current value of Bitcoin, they show losses at times.
10) Is Bitcoin really scarce?
Truth. Not just sparse but limited. This is one of the main pillars of Bitcoin. Its scheduled and predictable issue guarantees a great difference in relation to any other asset used as a store of value. Unlike traditional currencies like the dollar and the real, which can be printed at will by the government (causing inflation), Bitcoin has an expected issuance amount of 21 million Bitcoins.
conclusion
Today we still see many questions like these in this market because it is still just a baby: "in terms of adoption, cryptocurrencies are still in a beta phase, with less than 1% of the population using it. But it is growing very fast and the speed of Adoption of new technologies has grown at the same speed as the internet. We can expect a significant increase in this percentage in a few years."
