Bitcoin is a form of electronic currency. It might not be a physical coin, but it serves the same general purpose: to be exchanged for goods, services, or other currencies. Unlike government-backed or fiat currencies such as the US Dollar, Bitcoin is not controlled by any bank or governmental organization. It is decentralized. Bitcoin is a relatively new currency, with many misconceptions floating around the internet. Here are six common myths about Bitcoin you should avoid.
1. Bitcoin is Not Legit
This myth causes the most fear. Many worry that Bitcoin is not a legal currency and that they are more at risk of being arrested than the dollar. This is false. Bitcoins are treated just like dollars and Euros in terms of law enforcement. There are no exceptions for Bitcoin use. The only difference between using a Bitcoin and a dollar is that the Bitcoin is not physically in your hand.
2. Bitcoin is Anonymous
Bitcoin is not anonymous. Bitcoin’s public ledger, the blockchain, records all transactions of every Bitcoin address and shows who owns it. This means you can see all the transactions of anyone in the past. That said, you will likely remain anonymous when using Bitcoins on most major websites like Reddit or Bitmessage. Almost nobody uses their bitcoin address for anything other than buying or selling goods and services.
3. Bitcoin Transactions Are Insecure
This is a common misconception. At the beginning of Bitcoin, when it was just gaining traction, it was true that there were multiple hacks of bitcoin sites and thefts of Bitcoins. That’s no longer a problem, though: if you use an exchange like Coinbase or an e-wallet like Jaxx, your bitcoins will be kept in secure storage and not on the internet. If you’re using something else to store your Bitcoin, make sure it is secure by searching for reviews on the site first.
4. Bitcoin Up isn’t a Legit Trading System
Yes, Bitcoin is highly volatile. There have been plenty of times where it has dropped suddenly, and you may have gotten a big loss on your investment. However, there are ways to stay in the game and be profitable consistently with your bitcoin trading. One good strategy is to use Bitcoin Up as your main trading system and then use the Exchange Finder to get an arbitrage opportunity. The fiat-up software will help you do this with all of the other exchanges out there. And according to the Bitcoin Up review, it is a legit trading platform, and you can use it to the fullest of your advantage.
5. Bitcoin is Not Real Money
Though it may not be physical, Bitcoin is real money. Not only can you pay for goods and services with it like any normal currency, but the IRS has declared Bitcoins as an actual currency, equating it to the US dollar. This means that you can gain and lose with Bitcoin the same way as you would if your investment was in another asset class. The IRS states that the only difference is that Bitcoin is not subject to capital gains taxes.
6. Bitcoin is Not Fundamental in the Real World
Bitcoin is fundamental in the real world. Many people have started using it to buy everyday goods and services. Things like coffee and airplane tickets are among the first things you can buy with Bitcoins worldwide. Some stores even allow you to use Bitcoin as your sole payment method, which gives you a discount, especially if your store accepts Bitcoins for payment on a service or product. Also, since it is so easy to convert Bitcoins back into cash, you can use them to invest in stocks.
There are many more myths about Bitcoin, but you should avoid these most common ones. Some of them are just myths because they were created by people who misunderstood how Bitcoin works. Others might be completely neutral and not the best idea to use with Bitcoin, but you could make some money from them if you take the time to learn more about it. Also, the opportunity for big gains by investing your money in Bitcoin is still available. Still, you will have to research and ensure you’re using a legitimate trading platform to protect yourself.