Misconceptions About Bitcoin

Bitcoin has become one of the most talked-about, documented, and valuable digital currencies in the world. The digital coin was first reserved for the young and tech-savvy when it was first released in 2019 and has since morphed into a cryptocurrency that institutional investors, big companies, companies, and sovereign funds have looked into as the currency of the future. With that being said, there are still a few misconceptions surrounding the digital coin which have turned a few people against the movement. Here are some of the misconceptions as well as why they are not true.

Misconception #1: Bitcoin is Not Scalable

One of the main concerns that surfaced about bitcoin is that the number of transactions that can be completed every 10 minutes is much lower than Visa or other payment methods. This limits bitcoin’s scalability capabilities. However, any change to the size of the block would result in less security, decentralization, and the speed with which the transaction is completed. The variables that can be increased is more of a design choice currently as it is impossible to increase all three at once.

Misconception #2: Bitcoin has an Intrinsic Value of 0

This misconception comes from the digital aspect of the coin. Many believe that coins do not have value. This is certainly not true. Human beings have been assigning value to many items according to the demand of the item and the availability or supply. It is as a result of this basic financial concept that trade crypto with bitcoin champion. In addition to this, Bitcoin allows people to store value in something with secure and scarce units that can be transported all over the world.

Misconception #3: Bitcoin Mining Wastes Energy

There is no way around it, the bitcoin mining industry currently uses as much energy as a very small country. Naturally, this has brought about a few environmental concerns as the sector has only grown. The computing aspect of bitcoin mining uses a lot of energy, which is similar to the mining processes of tangible value stores such as gold or diamonds. That being said, mining technology developers have employed a hybrid system that provides renewable energy to power a portion of the system, which can be increased or decreased depending on the overall demand that is put on the mining system in use.

Misconception #4: Bitcoin is Highly Volatile

Bitcoin is often promoted as a store of value and exchange medium but it does have a very volatile price history. This has led to an understandable misconception that bitcoin is too volatile to be a good medium of exchange or store of value. Bitcoin is not the kind of investment fund that people put money into in case of an emergency or the down payment of a new home. The high volatility of the crypto coin has been attributed to the fact that it is an emerging value store that is only 12 years old and is currently still in the thick of both growth and speculation.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes