CryptocurrencyTop Bitcoin & Cryptocurrency Myths To Stay Away From

Top Bitcoin & Cryptocurrency Myths To Stay Away From

While in university, the majority of students desire to start their own business. Cryptocurrency-related businesses, in particular, are in great demand at this point in technical development. So, before jumping into the bitcoin business field, there are a few things to consider.

In general, digital currencies have become one of the most expensive yet lucrative investment options—particularly bitcoin, which is currently valued at USD 52,981. Before cryptocurrencies, the most common forms of investment among the general public were gold and business stock.

The general public’s interest in cryptocurrencies has risen with the introduction of cryptocurrencies and convenient ways for acquiring or receiving these digital currencies online. You may now convert BTC to USD legally and efficiently.

Here’s a fact about human behaviour: when something new enters the market, people’s opinions are swayed by false information.

Similarly, there have been several misconceptions about cryptocurrencies since their public debut, which you may have heard from various sources. Not only that, but some newcomers to the industry hold misunderstandings about cryptocurrencies and are dissatisfied as a consequence.

We’ll take a look at the top bitcoin myths that young people should be aware of today. Here are some “actual” facts to debunk some of these myths. Let’s get this started!

Myth 1: Cryptocurrencies are non-taxable

Many students assume that bitcoin is a type of online business that allows them to avoid paying taxes. If you do additional studies, you could find a statement saying that cryptocurrencies are not managed or overseen by the government or financial institutions. It is, in reality, a computer-controlled self-contained digital currency. Yes, you are accurate. On the other hand, cryptocurrencies are not taxed, which is a “False” consequence of this reality.

Supporters of the myth will use the following arguments to back up their claim:

Because cryptocurrencies like Bitcoin are neither developed nor regulated by the government or the banking sector, as a result, “a share of profit” in the form of taxes is unworthy of them. This is undeniably a persuasive argument.

The truth, on the other hand, is as follows:

For starters, governments all over the world do not recognise cryptocurrencies as legal tender. Bitcoin and other cryptocurrencies are capital assets for banks (meaning, stock in a businessperson or investor). As a result, cryptocurrencies, like other capital assets like freight, are still subject to taxation. The government of the United States, for example, imposes taxes on cryptocurrencies based on the income of the owner. For example, a bitcoin investor who earns USD 40,000 per year is exempt from paying taxes. However, if your annual income reaches USD 441450, the 15% tax rate remains in force and must be paid.

Similarly, if your income is more significant, you will still be taxed on 20% of it. However, certain restrictions include the bitcoin holder’s need to keep the bitcoin(s) for more than a year. Aside from that, the bitcoin tax calculator method considers both long-term and short-term capital gains.

Myth 2: Cryptocurrency is not as equally valued as real currency

In today’s rapidly growing world, it is human nature to trust what one can see!

Isn’t that the case? However, in the twenty-first century, the world has altered. Technical experts worldwide have created a “virtual” universe in which humans only exist as “data.” From online shopping to online payments, the virtual world is fading.

As a result, the world is split into two camps: those who think bitcoin is real money and those who do not. However, the fact is that Cryptocurrency is identical to real money. It is already commonplace. Even high-end conventional firms accept cryptocurrency payments such as bitcoin, such as Target.

On the other hand, cryptocurrencies have such a high value that the general public does not sufficiently understand them. One bitcoin is often valued at around 52 thousand USD(s), a substantial sum of money. Bitcoin, the first decentralised Cryptocurrency, was worth less than 0.01 USD when it initially appeared on the market in the 2000s. Bitcoin’s value started to climb later in 2013, hitting over a thousand dollars.

Apart from the reasons above, many accept this myth because cryptocurrencies’ “Gaining Procedure” is beyond their comprehension. Bitcoin mining, for example, was formerly a crucial element in the process of obtaining bitcoins. And this mining needs a profound grasp of computer systems and networks since it includes the verification of transactional blocks. As a result, cryptocurrencies have a history of being created for hackers, tech savages, and cloud-based enterprises. But it’s not the case! Gamers, influencers, and the general public may now buy and invest in Cryptocurrency on the internet.

Myth 3: Cryptocurrency is illegal and triggers money laundering

The general public, engaged in financial and political disputes, usually refers to Cryptocurrency as an unlawful form of currency. Since 2008, Bitcoin, one of the most prominent cryptocurrencies, has been functioning successfully in countries including the United States, India, and China.

Furthermore, China’s finance minister has stated that bitcoin is a “commodity” rather than “real money.” Nonetheless, it is not considered illegal. Cryptocurrency is illegal in countries such as Russia, Algeria, Bolivia, and Ecuador. In this example, the myth is debunked since Bitcoin is equally valuable as legal cash in the United States.

Genuine South Korean individuals are also allowed to buy and mine cryptocurrencies over the internet. As a consequence, only a few countries have outlawed Cryptocurrency.

India, for example, is pushing the use of cryptocurrencies to improve the capacity of digital money transactions and security systems in the country (which is still in the early stages of development).

As a consequence, we may conclude that Cryptocurrency is not illegal. It is, however, forbidden if an investor fails to pay taxes on cryptocurrencies (after making a taxable profit) or uses them to conduct illegal actions. Most importantly, “cryptocurrency laundering” has evolved into a form of cybercrime.

To begin, bitcoin laundering happens when individuals utilise online services, programmes, or wallets that allow them to create a false identity. To put it another way, the user’s identity is kept hidden. The term “pseudonymous” refers to this sort of payment. It is, however, an infrequent occurrence.

Myth 4: Cryptocurrencies are a way for criminals to getaway

Cryptocurrencies are used to put power in the hands of criminals since they are transferable without requiring the authentication of any bank account information or legal identification of the user. Many individuals will inform you that bitcoins are used for illegal purposes.

However, times have changed!

Following the 2013 Silk Road Raid, governments worldwide made efforts to make bitcoin use legal and safe. Indeed, countries like India have enacted KYC (Know Your Customer Policy) requirements for everyone who establishes a bitcoin wallet. Requiring bitcoin holders to submit or upload verification IDs online aids authorities in gathering data on them.

To add to the system’s security, KYC includes a “fingerprint” verification mechanism. As a result, bitcoin adoption in illicit marketplaces and casinos is no longer just a statistic.

Myth 5: Cryptocurrency Blockchains are monetary cloud-like database

Cryptocurrency mining looks to be a tech-savvy and challenging subject for new investors to grasp. For example, inexperienced investors may tell you that blockchains are a storage facility where clients may store bitcoin or litecoin. That, however, is not the case. In reality, blockchains are pretty similar to the “ledgers” used in banking and accounting. To put it another way, blockchain and cryptocurrency transactions. The Blockchain ensures that the bitcoin miner does not duplicate transactions.

As a result, the level of transparency increases. When comparing bitcoin blockchains to cloud databases, it becomes evident that blockchains store files. That is not the case, though. In the future, blockchains may be used to store a variety of data kinds.

For the time being, however, bitcoin blockchains are nothing more than a collection of blocks connected. In addition, each block has its ledger. As a result, a block gets connected to a blockchain once it has been resolved and confirmed. This is a process that cannot be reversed. This fact also supports the incorrect perception that bitcoin is a sham.

Myth 6: Students might think Bitcoin is the only hardcore valuable Cryptocurrency

Without a doubt, bitcoin is one of the world’s most well-known cryptocurrencies. You can locate Bitcoin ATMs almost everywhere in the United States. Have you ever come across a website, ATM, game, or mining programme that claims to produce cryptocurrencies other than bitcoin?

However, the reader might be shocked to find that bitcoin is not the only valuable Cryptocurrency on the planet. Less expensive cryptocurrencies, such as bitcoin and Etherum, are gaining appeal among the general public.

Due to its improved liquidity ratio and transfer value, Etherum has lately garnered the attention of high-end investors in the market. You’ll receive a worthless estimate if you try to determine a cryptocurrency’s “value” based on its market value. The reason for this is that a cryptocurrency’s worth is unrelated to its market value.

It is, however, contingent on whatever currency attracts the attention of the general public, investors, and entrepreneurs. Etherum will be the next Cryptocurrency to compete with Bitcoin, according to several business research and financial analyses.

Myth 7: The risk of “hacking” is infinite

The risk of “hacking” is one of the most common misconceptions that lead beginner investors to reject bitcoin investment prospects. Hackers and the internet’s vulnerability to hacking are no longer rare. More minor hackers start by breaking into people’s social media accounts.

Experienced and hungry hackers, on the other hand, may gain direct access to your monetary resources, such as a bank account, PayPal account, wire transfer account, or Bitcoin Wallet Account. The latter part, however, is wrong.

Above all, Bitcoin, Cryptocurrency, and BlockChain are new to the industry. In years, there have been minimal chances for any competent hacker to understand such a high-end, technically complex blockchain ledger. In the ten years after its birth, just 25% to 30% of the world’s population has fully grasped the concept of cryptocurrencies.

There are only a few participants because it is so new to the public. In the meantime, the danger has vanished.

Myth 8: The risk of “counterfeit” in Cryptocurrency is unavoidable

Cryptocurrency counterfeiting is a problematic issue in the business, whether you call it fiction, a misunderstanding, or difficulty understanding how bitcoin works. This is because Cryptocurrency does not exist.

As a result, there is an increased danger of forgery. It is, however, completely false. The reason for this is that each Cryptocurrency has its own set of codes. For example, your system has a unique IP address. Bitcoin, too, has a one-of-a-kind coding system. This method is used to identify Bitcoins (BTCs) and other cryptocurrencies.

Aside from that, there is the possibility of Cryptocurrency duplication. Duplicate transactions/blocks are detected and crashed using computer systems and software built particularly for bitcoin mining and transactions. Most of the time, individuals who propagate this myth would argue that counterfeiting involves “double spending” of bitcoin or any other cryptocurrency. Here’s a simple analogy to put things into perspective.

Bitcoin may be thought of as “blocks” in Blockchain. As a result, a user who transmits bitcoin to another user loses one block. As a result, the total quantity of bitcoins in hand decreases as the Blockchain shrinks.

Myth 9: Cryptocurrency = SCAM

Regardless of how serious this misconception looks, there are several reasons why Bitcoin is believed to be a massive fraud. As you can see, every industry in the world has its own set of advantages and disadvantages. Wherever a legal means of profit is discovered, a party always finds a way to scam the investors.

As a result, when it comes to cryptocurrencies, investors are prone to being cautious and second-guessing their every move. Because Cryptocurrency cannot be seen apart from its virtual presence in wallets, there is no chance of it becoming a scam because it is not illegal.

It is, after all, a question of good versus bad investment. If an investor is devoted and experienced enough, he may benefit from cryptocurrencies in the long term.

On the other hand, if the investor is greedy and interacts with an anonymous bitcoin buyer or seller, they are just falling victim to a scam. That is why you should look into the best bitcoin buying and selling websites. This is something that will come in handy in the future.

Misconceptions and reality will continue to obstruct your investment capacity as long as the cryptocurrency industry pokes its nose into the world’s traditional financial system.

There is no doubt that bitcoin is the way of the future in the financial sector. Remember that knowledge is power so keep learning and reading to be sure of the decisions that you make. 

Also Read: Cryptocurrency- Biggest Trends You Need To Know In Late 2020 & Beyond

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