Since bitcoin arrived on the economic playground in 2009, it became an object of speculation a mythical creature collected from rumors and unchecked facts. Few of them are true, most of them are not and some of them are on the verge of being either one. That is why we wanted to correct some of the facts that are partially or fully false. Let’s start with:
1. Bitcoin being a currency
Well, it certainly is called cryptocurrency, but what is actually meant by that? We shall leave the “crypto” part out of it for now and go over the generalized definition of the word “currency”. Currency is a system of money (monetary units) in common use. You can exchange money for goods and services so you would not have to pay for those with your own stuff. Bitcoins are not that spread for a time being. Yes, there are shops that do give you an opportunity to pay with cryptocurrency, though I doubt that smiling ice-cream salesgirl in the park will accept it.
2. Bitcoin is untraceable
Nothing is untraceable. Bitcoin flow is mediated through the use of an open source client, so it can’t be untraceable by default. Although, it is true that user can have any number of bitcoin addresses, which do not contain any information about the user; but others have ability to trace you, it depends on the level of surveillance you are under.
3. Bitcoin worth is much more unstable than it was before
Bitcoin had much higher peaks of its price to dollar in the past then it had recently. Simply look at the bitcoin worth in 2011 for yourself.
4. Bitcoin could be the store of value
Could be. In the future. Store value is an asset that never loses its value completely, though it can and does vary. If another economic crisis strikes anyone would be able to exchange that dusty golden ingot that lies forgotten in his or her basement. However, we are not sure about bitcoin, yet.
5. Run you fools, it’s a pyramid scheme!
Pyramid is a fraud. Fraud that forces participants to bring more people in to cover their own entry and earn some in the process. Only the top gets the jackpot. Bitcoin is decentralized and it works mostly as an exchange token between different currencies. So… where does one get a jackpot using bitcoin?
6. Total bitcoin reserves value is gigantic
Well… if $10.8 billion dollars is gigantic, than what would you say about the cash money stock in US, which is around $800 billion? Probably the estimated total cash number in the world would chill you out: $3.8 trillion. So, no total bitcoin value is not that vast in comparison to the crunchy cash around the world.
7. Providing more info on the users of bitcoin renders useless
Not by any chance. Definitely, the loss of anonymity could significantly lower the ability to launder money through it. However, while bank transfer commission exists, bitcoin will not lose its niche.
8. Bitcoin promotes money laundering
…for terrorists, criminal syndicates and drug dealers. Again, we stumble upon the problems of anonymity and stability. At this point, risk regarding the use of bitcoin is not something organized crime leaders would consider. Cryptocurrency is still too volatile to be used for something that could put them in jail.
9. New cryptocurrency will replace bitcoin
While you are reading this I might suggest you consider throwing out your laptop and fancy I-Phone. New models are probably getting ready to hit the market, so you better get rid of the old stuff to free the place. We can’t outrun the technological evolution but it is not the reason to forsaken the good stuff that works. Bitcoin certainly does. And if you are still not sure, check out “Litecoin”, “Peercoin” or even “Dogecoin”.
10. It is ready to be used as all-recognized currency
We wish it did. The reality of the situation is slightly less unambiguous. Bitcoin is still a new player with some childhood illnesses, some of which are unique to cryptocurrency, others are infections that transmit from the money themselves. Anyway, never put all your eggs in one basket. Especially, when the basket is as new as bitcoin.
As the afterthought, I guess anyone, who is reading this probably has already bought a handful of bitcoins or is planning to do so. I personally think that bitcoins are a great novelty that opens up new opportunity and I do encourage you to use them. Just remember to use your head first.