Bitcoin has been here almost for a decade now but still, there are abundant myths surrounding Bitcoin that keeps percolating amongst the newbies and veterans alike.
Nevertheless, the best way is to clarify these myths because any truly decentralized and censorship-resistant tech is bound to have these things.
I also understand that most of the times it can be really difficult to grasp the subject of 'Bitcoin' because it has many angles such as computer science, maths, cryptography, economics, psychology, & sometimes philosophical too.
Having so many angles can really blur the real fact hidden behind because we humans have the habit reaching conclusions very fast.
But anyways, let me give a shot and help you know about some myths that you should do away with surrounding Bitcoin.
So here are 5 of those myths related to Bitcoin.
1. Bitcoin Is Scam & Ponzi
Ponzi Scheme Image from HYIP.COM
I even don't remember how many times I have heard this by now, 'Bitcoin is a scam, Ponzi and fraudulent'. And the reasons behind these baseless arguments are mostly such as:
Founder 'Satoshi Nakamoto' ran away
Satoshi own's 1 million bitcoins
People lost money
Wild volatility in BTC markets
BTC is not backed by anything etc..
But people who say all these things, I want to ask them if they understand anything about decentralization, free-market economics, or intrinsic value.
To me, it looks like they don't understand anything…
Founder 'Satoshi Nakamoto' got sideways because he intended to keep the project totally decentralized without the involvement of any human dependancy or single point of failures. And what also if he owns 1 million bitcoins, it is still better than central banks printing an unaccounted amount of fiat useless paper money.
And of course, people will lose money if they are gambling or trading, BTC markets are free-markets and this asset class is the most un-correlated asset classes we have seen until now, so if you gamble and trade you will lose.
Lastly, if BTC is not backed by anything, please tell me what backs you national currencies that get annually inflated away with 13000% inflation like Venezuela.
Sorry, to those who think BTC is not backed by anything, they are incorrect, BTC is backed by its maths, censorship resistance, and decentralization etc.
OK, I agree, BTC was first used for many illegal activities and was especially involved in transactions on silk road (marketplace) but I don't see anything wrong with it, why, I will tell you further in this write-up.
Later it was also used by WikiLeaks, the famous whistleblower in the world when all banks stopped supporting them.
WikiLeaks now accepts anonymous Bitcoin donations on 1HB5XMLmzFVj8ALj6mfBsbifRoD4miY36v
But no one talks what happened after that, these two adoptions actually pushed Bitcoin towards mainstream adoption, when people started buying Pizzas with BTC. (Why no one questioning Pizzas??)
When all these activities, illegal & legal both, are done through fiat currencies around the world than there are no voices raised, no questions are asked, nor we think off declaring fiat national currencies as a fraud that is being used for illicit purposes.
Lastly, thanks to this shoutout, I haven't seen anyone HODLing fiat USD or EUR making such remarks:)
My deepest thanks to the US government, Senator McCain and Senator Lieberman for pushing Visa, MasterCard, Payal, AmEx, Mooneybookers, et al, into erecting an illegal banking blockade against @WikiLeaks starting in 2010. It caused us to invest in Bitcoin — with > 50000% return. pic.twitter.com/9i8D69yxLC
Ok, let me try again and clear some dust off, Bitcoin mining is NOT waste of energy.
Bitcoin gives you self-sovereign money, resilence, immutability in exchange for so much energy the protocol consumes and if these are small things, perhaps you might have missed the whole point, why Bitcoin was created.
Also, getting rid of proof-of-work that actually consumes a lot of energy isn't the most intelligent solution instead we should find out better, sustainable, greener ways to satisfy the need of the Bitcoin protocol.
Some pioneers like Standard American Mining have already started implementing sustainable solutions like converting waste-to-energy for crypto mining.
Lastly, I like these two tweets by Andreas Antonopoulos that are bang on target to shut the mouth of Bitcoin energy waste issue.
Um no. Immutability is not a waste of energy. Christmas lights are a waste of energy
4. Bitcoin Is Dead, Useless, & Supports High Fees etc.
Yeah, everyone will die one day, so what?
But let me tell you even if you or I die the protocol can run, it is so resilient, adaptable, & powerful that it will still survive a nuclear attack also because of its self-governing & self-sustaining maths & cryptography behind it. As the difficulty might come down by then and some people might start mining it on their PCs again.
And of course, when something is so resilient, you should ask can it be useless then, in my opinion, NO, it can't be.
Apart from this many Bitcoin and cryptocurrency hacks as big as Mt.Gox or Coincheck etc has happened and Bitcoin has seen the next day even more powerfully, so this in itself speaks volumes.
And the number of times Bitcoin obituaries have been proven wrong can be seen here.
Also, simply because the fees are high sometimes doesn't make it useless too.
But one should not write-off Bitcoin simply looking at its present condition and high fees as it is just a matter of time its software will develop and evolve. And it has started evolving too, now with segwit adoption increasing you are able to witness Bitcoin fees as low as 1 Satoshis/byte.
We've reached a major milestone! 🙌 $BTC tx fees are now at an ALL TIME LOW. We are now seeing transactions below 1 sat / byte for the first time ever. You can send #bitcoin for ~0.1 cents ( ~100 satoshis ) per transaction. 👇🎉 👏#bitcoinisscaling#segwitpic.twitter.com/DZy7h5yYJK
Enough of this narrative, 'Bitcoin is costly and I can't afford it so let me pick up some cheap Ripple and Cardano etc' but that's not how it should be.
If you are into cryptocurrency investments and don't own bitcoins, you are doing it wrong, however, it doesn't mean, you shouldn't buy other coins but the narrative of cheap and costly coins is simply stupid.
Many people think that they need to buy one whole BTC but that's not the case, Bitcoin is divisible 10^-8 so you can buy a lot of bitcoin fractions with whatever money you have.
The smallest unit is called Satoshi and you can buy many satoshis in 100-200$ also, see this guide for reference to understand Bitcoin divisibility: What is Satoshi? Satoshi To BTC & USD Converters.
Keep your 50-60% money in BTC and you will not go wrong in the long term and keep it safe in hardware wallets like Ledger Nano S and don't fall for cheap coins because it is very likely that many cheap coins might not see another day sometime in future.
Still, if you don't understand my narrative, I recommend you to watch this short tutorial on Bitcoin's divisibility and monetary policy.
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