Last updated on November 4th, 2024 at 04:28 am
Bitcoin was created in 2008 by a person or group of people under the pseudonym Satoshi Nakamoto and since then has emerged to be the most recognizable cryptocurrency in the world. But with its popularity springs misconceptions and wrong ideas about it.
The adoption of a crypto asset as a legalized form of payment has grown around countries in the world. Meanwhile, there are some other countries where cryptocurrencies are banned or restricted.
Amid the ban, users of Bitcoin and cryptocurrency, in general, continue to rise daily. some countries with the most cryptocurrency users include India, the USA, Russia, Nigeria, Brazil, Ukraine, and others.
Bitcoin and cryptocurrencies in general are not as complicated as people think. Each of them is created for a purpose and with proper research, you should be able to get a sense of what it is. Our post about Bitcoin and why it is valuable should help you understand it better.
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So in my daily life, I have come across some wrong ideas about Bitcoin from friends and family, and in this post, I will be addressing these misconceptions and giving responses to them.
Bitcoin Misconceptions
- Bitcoin is very expensive
- Bitcoin is illegal and is used by criminals
- Bitcoin is difficult to invest in
1. Bitcoin is Too Expensive
This is the most common misconception about Bitcoin I have heard in recent times. People begin to ask questions like how am I supposed to buy 1 Bitcoin when it sits at a price of about $19,000 (as of the time of writing this content)? Also asking how they are supposed to buy Bitcoin when it already had an all-time high of about $68,000 which happened in November 2021.
For anyone who is still at the start of their cryptocurrency journey, this is one of the major problems and questions that come to their mind. Generally, there is a 21 million Bitcoin limit which means that there only ever will be 21 million Bitcoins mined.
To correct this misconception, you should know that these 21 million mineable Bitcoins can be further divided into 100,000,000 (100 million) individual units referred to as “Satoshis”. A satoshi can be described as the smallest unit of Bitcoin.
Many people who want to buy Bitcoin for the first time see this price ($20,000) and then think it is the entry price. This usually kills their interest as they equate it to purchasing a property, like a house or a car.
They get this idea when they read Bitcoin articles online or see reports and price analyses, especially when Bitcoin reaches a new high and then they feel like it is too late for them to start. It should be known that you can buy satoshis – fractions of Bitcoin as opposed to buying a full portion.
This is an easy misconception people arrive at and it is easily explained to newbies. Ironically, Bitcoin experiences a surge in investment when the price rockets and this is due to FOMO (Fear of Missing Out).
2. Bitcoin is illegal and is used by criminals
Most of the time, when we watch Hollywood movies, we see Bitcoin being used for illegal activities, like buying drugs, and guns, doing illegal deals, or generally used as dark and untraceable money.
This misconception is difficult to debunk because there are elements of truth in it from the early start of Bitcoin. When people reference Bitcoin being a tool for criminals they mostly talk about it with what they have heard or seen in movies and without facts.
Ross Ulbricht, an American inmate was incarcerated and sentenced to life imprisonment for creating and operating the darknet market website known as Silk Road where you could buy illegal substances and use Bitcoin as a mode of payment.
Another person that might come to mind when talking about Bitcoin and its illegal connections will be “Shiny Flakes” whose real name is Maximilian Schmidt. Maximilian almost created an illegal online marketplace for drugs and Bitcoin as a payment method. There is a documentary on Netflix showing how he built a drug empire from his childhood bedroom.
To correct this misconception, Bitcoin is not illegal and it wasn’t created for criminal purposes. Bitcoin can be accessed by anyone through a decentralized distributed ledger with an internet connection. Some people are blockchain forensic analysts who can monitor transactions and can tell when there are illegal transactions taking place.
Our local fiat currencies still record the biggest hidden illegal dealings and money laundering through shell companies. Bitcoin offers a way to fix this by making every transaction that takes place on its network transparent.
Cryptocurrency exchanges regulate and keep track of transactions on their platform and also report shady and suspicious transactions. This regulation brings trust and comfort to newbies willing to start their Bitcoin journey.
3. Bitcoin is difficult to invest in
One of the misconceptions people have about Bitcoin is that it is difficult to invest in. This idea is common among first-timers who are not familiar with crypto exchanges and how they work.
Cryptocurrency exchanges are platforms or marketplaces where you can buy, sell or trade cryptocurrencies with ease. As a starter in cryptocurrency, you can check out the best cryptocurrency exchange for beginners to have an idea of how to start.
The concept of exchanges makes investing in Bitcoin and other cryptocurrencies easy and fast. Like we previously said, you don’t have to buy 1 Bitcoin, you can buy satoshis. It is advisable to not invest a large portion of your income in Bitcoin and cryptocurrencies in general because they are very volatile assets and without proper information, you could lose everything.
Choosing a platform to start your crypto journey with might be tasking, you need to focus on what you want before making a choice. Investing may seem difficult at first, but it becomes easier when you break it down into steps using a trustworthy exchange.
Final Thoughts
Bitcoin and cryptocurrencies, in general, are still in the early stages with many more innovations to follow in coming times. With the rise in popularity of Bitcoin, more misconceptions will spring up and it will be needed to always correct them.
Investing in Bitcoin is easy, and following these 5 steps to invest in cryptocurrency, you will get a clearer insight into how to go about it.
Bitcoin is not too expensive to invest in, it was not created for illegal transactions and it is not difficult to invest in. I hope with this article, I have been able to correct these misconceptions about Bitcoin.
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Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications such as Coinfomania and Crypto News Guru, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.