Cryptocurrency is a digital currency or an exchange medium that uses cryptographic protocols to guarantee transactions’ safety and authenticity.
However, the introduction of cryptocurrencies has rocked different parts of the world. Amidst their popularity, most individuals have no idea how cryptocurrency exchanges work and find them perplexing.
As a result, much misinformation has spread. It is critical to distinguish between facts and fiction. If you’ve been planning to invest in cryptos, you should first conduct research.
Here are some of the most common cryptocurrency misconceptions that you should not believe.
Misconceptions About Cryptocurrency
1. Cryptocurrency exchanges are fraudulent.
A major common misconception is that crypto represents nothing more than a total sham.
When one investor seeks a legal way to earn money, someone else is seeking a means to defraud others.
But when it comes to crypto investing, investors tend to be conservative and overthink every choice.
Even so, scammers have developed schemes to defraud you of your cryptocurrency or money.
For instance, there have been numerous initial coin offerings (ICOs) that have turned into fraudulent scams.
In other crypto exchange scams, someone may try to convince you to accept unauthenticated transactions or contact you trying to pretend to be a member of the government and opt to pay your debt payments in cryptos.
Cryptocurrency exchanges are nearly impossible to scam because the authorities have not outlawed them.
You can make investments in digital currencies as long as you manage your risk effectively and take precautions.
2. Cryptocurrency is prohibited.
One of the oldest and most widespread misconceptions about cryptocurrencies is that they are primarily used for illegal purposes.
According to Chainalysis, only 0.34 per cent of cryptocurrency transactions in 2020 were illegal. That is lower than the traditional banking industry.
Many investors now view cryptocurrencies like Bitcoin and others as a hedge against inflation, and they use virtual currencies to increase revenues.
Although cryptocurrency has been banned in countries such as Ecuador, Trinidad, Russia, Algeria, and Bolivia, the United States, EU, and G7 have made cryptocurrencies legal currency.
So, believing that cryptocurrency is illegal is one of the crypto misconceptions that is completely untrue.
3. It is easy to hack cryptocurrency.
Among the most popular misconceptions of them all. Like with most things in this world, there are safe and unsafe ways to handle cryptos.
It all boils down to the decisions you make. Investing in cryptocurrency is similar to other types of trading.
Increasing the security of wallets in which cryptocurrency trading is possible is the only method that will protect your wallet and improve safe transactions. Other hacks can be avoided by using a secure browser for transactions.
Choose A Highly Secure Crypto Exchange
Hacks are quite alarming in the crypto space, given how some well-established crypto exchanges and platforms became a target of cybercriminals.
To ensure you are safe from these fraudulent activities, you must choose a highly secure crypto platform like Bitcoin Up. A lot of good reviews were given by the users who are truly impressed by the platform’s security and other features.
4. Cryptocurrency is a temporary thing.
The online world, computers, and email were once thought to be only of interest to a small group of tech enthusiasts; they are now commonplace in modern personal and professional lives.
It’s difficult to determine which cryptocurrency there will be in the next few years; besides that, the technology they pioneered and the services they stimulated will almost certainly continue to evolve and improve.
Several businesses are heavily investing in altcoins, and authorities are exploring methods for introducing officially recognised crypto assets tied to a more stable investment.
Also, consumers and investment companies are becoming incredibly interested in decentralised finance applications.
Thus, the real and digital worlds are increasingly blending, and crypto coins are likely to play a role in this.
5. Crypto is affecting the environment.
Since cryptocurrency is one of the most energy-intensive cryptos due to its reliance on a verification procedure, numerous new and current projects are now shifting to a proof-of-stake framework, which is more environmentally friendly and provides the very same degree of security.
Mining operations, on the other hand, have fewer environmental impacts if they are powered primarily by renewable energy.
You should now have a good understanding of the misconceptions and reasons why they are falsifiable. It’s advisable to seek expert advice before making any investment decision.
Consult with a professional and seek advice from reliable sources. Aside from the points that we’ve discussed, keep in mind that there are various other misconceptions out there.
Before accepting any information, remarks, or misconceptions as true, you should properly examine them.