Amidst crypto market crash, let’s bust 7 biggest Bitcoin myths

Amidst crypto market crash, let’s bust 7 biggest Bitcoin myths

Bitcoin has been again in the news! Anyone following the cryptocurrency market would be familiar with the ups and downs of Bitcoin and the crypto market. Those who do not follow and have little or no idea of cryptocurrency are also aware of the current market behaviour, particularly the price of Bitcoin. There are plenty of people these days who are boasting – I told you so, Bitcoin is not a good investment option.

There are too much of misconceptions when it comes to Bitcoin and cryptocurrency.

Before we get into those myths, let’s understand the coin in detail.

What is Bitcoin?

If we refer to its website, Bitcoin is defined as a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. 

Bitcoin was launched on January 3, 2009, by Satoshi Nakamoto. Although the name is often associated with Bitcoin, the real person who bears the name has never been identified, leading many to speculate that it is a pseudonym for a person or group of persons with a different identity.

Undoubtedly, Bitcoin still rules the cryptocurrency market.

Myth 1 – Cryptocurrency = Bitcoin and the vice versa

You might find it strange, but the majority of people think that way. The fact is that cryptocurrencies go beyond Bitcoins. Etherium, Solano, Cardano, and other cryptocurrencies are potentially viable alternatives. New tokens are launched every day. 

However, Bitcoin continues to lead the pack in terms of popularity.

In several surveys conducted globally, a majority of people believed cryptocurrencies to be on par with Bitcoins. Information or understanding regarding the currency is still not widely spread. According to a research titled “The State of U.S. Crypto Report” published by Gemini Trust Company, a US-based cryptocurrency exchange, Bitcoin continues to be practically synonymous with cryptocurrency, but few people are aware of alternative coins. A little more than one-third of owners or crypto-curious people (or 95% of them) have heard of Ethereum.

Myth 2 – Bitcoin is illegal

How many times have you heard people saying the currency is illegal and used for gambling and funding terrorism.

The fact is that Bitcoin is a decentralized currency backed by blockchain technology. Any innovation or breakthrough is not accepted easily and Bitcoin has taken more than a decade to get that acceptance. In India, not long back, it was banned by the Reserve Bank of India till Supreme Court gave a judgement in 2020 allowing to buy, sell, and trade cryptocurrencies. Earlier this year,  Finance Minister Ms Nirmala Sitharaman announced that income from the transfer of digital assets would be taxed at a 30 per cent rate and 1% TDS to be deducted. This would impact gains from cryptocurrency and NFTs as well.

Though it was high taxation, Crypto investors and entrepreneurs welcome it because, for the first time in India, there was some development in the regulations.

However, after a few weeks, Finance Minister Nirmala Sitharaman said in Parliament the government has not done anything to legalize or ban cryptocurrencies at this stage. “We have only taxed the profit emanating from the transactions.” 

Similarly, in the global scenario, the adoption of Cryptocurrency has not been so easy.

Top 5 crypto hotspots and unfriendly nations

Myth 3 – Your Bitcoin investment easily stolen by hackers

Cybersecurity has been a concern with the extensive use of digital devices. There are cases of hacking that are reported every day. However, we continue to use digital payments, net banking, online shopping, etc. If one recalls, how much resistance netbanking witness when it was launched?

Every disruptive technology has its share of controversy and resistance. The same is for Bitcoin, as it is purely a digital currency. On the contrary, Bitcoin is backed by Blockchain technology which is decentralized and thus secure.

There are generally two ways of keeping your Bitcoins. The first and the simplest way is to keep it on the crypto exchange where you purchased it. Called a hosted wallet, they allow you to buy and sell. Some popular Indian crypto wallets include WazirX, Coinbase, and CoinDCX. The wallets are anonymous and may be accessed from a computer, mobile device, or laptop. These wallets allow you to buy, sell, and manage your cryptocurrency directly on their site.

There are reports of Crypto exchanges being subject to hacking. In 2021, more than 20 hacks worth more than $100 million were reported. Therefore, one must go for a crypto wallet if one wants to trade, buy, and sell cryptocurrencies more safely. It allows you to store and transfer your funds with complete security because they are cryptographically safeguarded. Traders need them to store crypto securely, as well as to protect and validate transaction information. Crypto wallets come with a private key; hence, it is a safe option.

Read more about Crypto wallets

Myth 4 – Bitcoin trading is complex, can be handled by techies

Do you know that 8% of Indians have already made a cryptocurrency investment? How would so many Indians adopt it if it had been complex and challenging? In fact, India placed second globally in terms of crypto adoption in 2021, behind Vietnam and ahead of nations like the US, UK, and China, according to blockchain data company Chainalysis. Men and women from large cities, tier two and three cities and towns, young students, older professionals, and Bollywood artists have all expressed acceptance.

The reality is it is very simple to kickstart the journey of investment.

Several Indian and foreign Cryptocurrency exchange platforms – Unocoin, WazirX, Zebpay, CoinDCX, and CoinSwitch, are the leading domestic ones. It is easy to open an account on any of these platforms, similar to opening a bank account. These Apps are available for download from the Google Play Store on your smartphone.

The process is very standard. There are several videos that help you with step-by-step from signing up to confirmation after submitting the documents. Ashish Singhal, co-founder and CEO of CoinSwitch Kuber, in an interview to the Forbes Magazine said that they are making crypto investing as simple as ordering food online. “The aim is to create an investment ecosystem that simplifies investing in crypto for retail users,” he said.

Follow these 5 simple steps to start your crypto investment in India

Myth 5 – Bitcoin is so expensive, so only a few can afford

One does not have to buy one full Bitcoin to trade or own the coin. Though the price is currently trading at a much low price of 15 lakhs, it is still a lot of money. Do you know the smallest unit of the cryptocurrency bitcoin is the satoshi? It is named after Satoshi Nakamoto, the creator(s) of the Bitcoin cryptocurrency and the blockchain protocol. The satoshi to bitcoin ratio is 100 million satoshis to one bitcoin. The crypto exchanges will let you buy a fraction of the coin.

There are many other coins which are much lesser in price, but still have a lot of worth. For example, the second-best is Ether.

Myth 6 – Bitcoin can change your fortune overnight

There was a point in time when Bitcoin was synonymous with gambling and associated with making money overnight. The reason for having such a perception could be linked to its volatile history. Among all the asset classes, the graph of Bitcoin has seen a fast movement.

In 2009, when it was launched, its value was zero, in 2010, it jumped to $.09 to one of the biggest gains – $29.60 by June 2011, an increase of 2,960%. In 2012, the price again declined drastically only to revive in 2013 when it start trading at $13.28 and reached $230 in April. The price again went down to $68.50 in a matter of a few weeks. In October 2013, Bitcoin’s price touched again $123.00 to reach a peak of $1,237.55 by December. However, the price fell within three days to $687.02.

The real spike happened In 2017 when Bitcoin’s price touched $1,000 to $2,000 in mid-May and $19,345.49 in December.

2018 and 2019 were not good years for cryptocurrency as the price of all cryptocurrencies plummeted. By end of 2019, the price of Bitcoin was $6,635.84.

The real change happened when Covid hit and Bitcoin started trading for $19,157.16. Bitcoin’s price reached $29,000 by end of the year. In 2021, it reached an all-time high at $63,558 on April 12, 2021. In 2022, it gradually declined, reaching $47,445 by the end of March. In 2022, the crypto market crashed and the price again plunged touching $18,000 and continuing to stay under $20,000. 

Investopedia / Hugo Lin

Myth 7 – Bitcoin isn’t a good investment option

This myth is perhaps linked to a lack of understanding about cryptocurrency among the people. They only see the volatility part of it. Anyone who invests in stock exchange takes some risks, the same goes for cryptocurrencies,

Long-term investing is thought to be ideal for any investment. When it comes to cryptocurrency, the same has been seen. Investors consider digital assets seriously. They are treated at par with other financial investments. As more and more people are investing, the trust in the market is increasing. There is no negativity or insecurity whatsoever when retaining these assets over a reasonable time. Even major banks such as Goldman Sachs and Morgan Stanley are getting into the game.

You might begin with a very little sum and increase your investment as you gain experience and a better grasp of the markets. Investments in cryptocurrencies are risky, just like any other financial product. By going through the right websites that provide comprehensive information, forecasts, and daily market conditions, you can keep an eye on the market.

Cryptocurrency is emerging as a new investment for a large number of people. As per the Gemini report, more than a quarter (26%) of current owners first acquired crypto in the last year, and a full 68% purchased crypto within the last two years. This shows crypto adoption is growing and growing fast.

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