These are the three biggest myths surrounding
You don’t have to believe that Bitcoin’s value is unreasonable or that it is too volatile for practical use. This is the place to be. The truth about Bitcoin is not fiction. We expose the real risks and separate the fantasy from reality. Instant transactions, the ability of playing the best online casino in India, instant transfers, and the ability to pay for cryptocurrency services are just a few of the many benefits. These are all factors that give cryptocurrency an infinite advantage. We will now discuss the myths surrounding Bitcoin.
Myth No. Myth No. 1: Bitcoin is a bubble
Although bitcoin is seen by some investors as a speculative investment that promises huge profits, it does not necessarily mean that bitcoin is a bubble. Bubbles are economic cycles that result in unsustainable increases of market value. When investors realize that the price of the financial product is much more than its fundamental value, they burst. Bitcoin is often compared to the famous speculative bubble that erupted in the early days modern finance. This was the Dutch “tulipmania” of 17th-century Holland. In 1637, speculators increased the prices of certain varieties of Tulips 26-fold. After six months, the bubble burst. It was never reversed.
The truth is:
Bitcoin has experienced many price cycles in the past 12 years. Each time, they have recovered and reached new highs. Rise-fall cycles are normal with any new technology. Amazon stock plunged from $100 to $5 at the end the dot-com boom in the 1990s. Over the years, Amazon grew to be one of the most valued companies in the world.
Major bitcoin investors believe that bitcoin’s volatility is typical of young markets. According to them, bitcoin’s price will fluctuate with shorter swings and more stable periods until it reaches a point of relative stability. This can only be seen with hindsight.
Myth #2: Bitcoin doesn’t have a practical application
Critics love to claim that bitcoin is of no practical value or, if it has, it is used for illegal business. Both of these claims are false. Bitcoin is a trusted global payment method that has been around for a long time. It has never relied on intermediaries such as banks or payment systems. Well-funded institutional investors are increasingly using cryptocurrency as a hedge against inflation just like gold.
The truth is:
Bitcoin, which is an inflation-resistant savings vehicle, has gained popularity in recent years. It has been compared to gold and has been called “digital gold”. To better manage their assets, a growing number of public funds and companies such as Tesla, Square, MicroStrategy have purchased bitcoins worth millions to even billions of USD.
Bitcoin is a rare commodity, just like gold. There are only 21 million bitcoins. It is heavy, bulky, and hard to store and transport gold. However, Bitcoin can be sent digitally just like an e-mail.
In its early years, Bitcoin was known for being a payment method for the darknet. Bitcoin prices rose quickly after the closure of the first major darknet marketplace, and they didn’t stop rising for a few more days.
As with all forms of payment bitcoins can be misused. However, bitcoin’s illegal use is small compared to the U.S. Dollar. A recent report found that 2.1% of bitcoin transactions were related to criminal activity in 2019.
Because all bitcoin transactions are done on a public blockchain it is much easier for authorities to track illegal activity than in traditional financial systems.
Myth #3: Bitcoin doesn’t have any real value
Bitcoin is not supported by physical assets such as gold but neither is the U.S. Dollar or any other fiat currency. Bitcoin’s DNA is made up of deficit, which helps to resist inflation. Inflation can happen in fiat currencies when large amounts are created. This dilutes the money supply.
The truth is:
– There will never more than 21,000,000 bitcoins. This scarcity is key to determining value.
The supply of bitcoins is limited and the number of new ones created over time decreases. A “halving” event occurs every four years. The reward miners get on the network for each block they complete is then halved.
This assures that there is always a shortage of supply, which, in accordance to the principle of economic scarcity, has caused Bitcoin’s price to rise over the long-term, rising from less than 1 cent to more than $50,000 by mid-February 2021. (Check out the current Bitcoin rate.
Bitcoin’s value is also derived from the services provided by computers that participate in mining. The vast processing power required to verify and secure each transaction is provided by powerful computers all over the globe. In return, they are awarded new bitcoins.
