Top 5 Crypto Myths You Should Forget Today

[ZionRTZ]

I saw this article today about these 5 crypto myths. I think this was written for newbies since I believe more experienced crypto traders/investors is already aware of this.




Since Bitcoin made its way into people’s consciousness, the concept of digital currency has caught the imagination of financial market players and tech enthusiasts alike. In 2019, Bitcoin completes a decade of existence. In these ten years, we have seen the transition of cryptocurrencies, from being an exotic asset class to something that holds great importance for the future. Companies have adopted it as a mode of payment and so have governments. Start-ups worldwide are devising credible solutions around blockchain technology, which is touted to disrupt existing frameworks.

So, as we enter into the 10th year of the crypto-craze, it’s time to do away with some popular misconceptions around blockchain and cryptocurrencies. As only with knowledge can mass adoption of digital currencies take hold.

Myth #1: Bitcoin is Blockchain Technology and Vice Versa
Yes, the technology did debut with Bitcoin, but it is not exclusively limited to the currency. The blockchain is a distributed ledger that enables peer-to-peer consensus on the recording of transactions. It is open-source, public and anonymous. It is the underlying technology that maintains the Bitcoin transaction ledger too.

Still, Bitcoin is one of the many applications of blockchain technology. When someone uses the cryptocurrency, miners solve very perplexing algorithms to verify the legitimacy of the transaction, in turn getting rewarded with Bitcoins. The blockchain built for Bitcoin was exclusive; but, with time, this technology has been adapted to other areas. This brings us to the second myth.

Myth #2: Blockchain’s Role is Limited to Cryptocurrencies
Both technologies work in fabulous ways together, but they work brilliantly on their own too. With the advent of the Ethereum blockchain, smart contracts came onto the scene. Blockchain could now be used as a token-free shared ledger, which benefitted many industrial applications. Be it real-estate, supply-chain, identity management, banking or even food procurement; blockchain has applications in multiple sectors.

Myth #3: Cryptocurrency Markets are Non-Regulated
While this may have been the case five years ago, circumstances are different now. Major countries have taken steps to regulate this asset class. Even banning crypto trading, as China has, is a regulatory decision. The US SEC investigative report of 2017 clearly outlines that the offer and sale of digital assets by companies are subject to Federal Securities laws. Even the IRS views them as properties, on which capital gains taxes are applicable.

Myth#4: Cryptocurrency and Blockchain Uphold User Anonymity
Yes, but only to a certain extent. If Bitcoin users appear under pseudonyms, their identities are still revealed during purchases. Many government bodies have formed relationships with credible exchanges to trace the owners of wallets. But, there are coins, like Monero, which use extra features like ring signatures and address derivation to protect identities.

Myth #5: Tokens and Coins Have Same Uses
Coins like Bitcoin acts as simple storage of value. Tokens have complex functionalities. Utility tokens, which are put up in ICOs, serve purposes like providing access rights to a network, or a way to claim dividends from a company in the future. Tokens can also capture commodities or loyalty points.

[MVT$]

Myth number five I think is the most common mistake of newbies. Often calling a coin, a token and vise versa.

[sauravkumar316]

We all know this & this is the truth, but some people who comes enter CC market just for money, these things doesnt really matter, also it wont even matter for them if you tell them these things 100 times, still they wont understand & listen, for them the tech is not important, only money is, thats why they are here(trust me, i did almost 2 years of moderation work, in different project, its a personal experience, sometimes when you talk to people we call "noobs" you just want to bang your head into wall after you tried to explain the same thing 5 times)

[Hadley]

Myth number five I think is the most common mistake of newbies. Often calling a coin, a token and vise versa.

Me too when I first join this market, I alway confuse about coin and token. but after take a long time of study and with this article, now I'm clearly know how to define them