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6 myths about cryptocurrencies
Written by Davies on / Reading time: 4 minutes.
The beginnings of virtual currencies were not very good, society did not trust this new financial system that contrasted with traditional and conventional money. We were used to using physical money and the idea of being able to use and transact with intangible money seemed unlikely. However, the world of cryptocurrencies has not disappeared, instead it has evolved and growth over the years.
Satoshi Nakamoto, ring any bells? It is the name given to the creator of the first cryptocurrency, Bitcoin, created in 2009. He was the pioneer of a large list of cryptocurrencies that have been created over time and that are still born. Within that list is DAVIES, a cryptocurrency that was created a year ago, in 2018. DAVIES has its own features and has an App for your smartphone and your computer.
What are the most repeated myths about cryptocurrencies?
There are many myths about these famous virtual currencies. There are still people who do not trust this financial system because they consider them to involve illegal aspects. What do you think this is about? Yes, there is still a lot of misinformation about cryptocurrencies which leads to keep mistrusting. Because of the misinformation that exists, although it gradually decreases, many people do not know how the world of cryptocurrencies works and, therefore, they believe the false myths.
1. Cryptocurrencies can be counterfeit
FALSE. Cryptocurrencies cannot be counterfeited. Each virtual currency operates with its own codes, allowing them to not be counterfeited. Because of the blockchain technology used by cryptocurrencies it is not possible to record the transactions that a person performs, nor the order in which they do so. The fact that they cannot be counterfeited prevent such transactions from being duplicated or create equal virtual currencies. The system would detect them and then crash in a few seconds.
2. The government can forbid them
Thanks to its main characteristics, decentralization, the government cannot forbid them. Why? Because the technology on which they are based, blockchain, is a system that is not regulated by any government or any institution. So, they have no power to make changes or modifications to them. In fact, decentralization is the main difference between crypto-assets and fiat money.
3. They are designed to be used and invested in by people who have knowledge of technology
FALSE. It is not true, anyone who wants to use or invest in cryptocurrencies can do so. They are not only for the technology sector but are aimed at any sector. Only a basic knowledge of their use and investment is needed, as well as truthful information about what they are and what their advantages are. Today, there are many and diverse companies that allow to pay for their products or services with cryptocurrencies. There are also others who have created their own virtual currency or are in the process of developing it.
4. The actions you take with them cannot be tracked
FALSE. Its blockchain technology prevents that from happening. This technology, among other functionalities, performs the verification of transactions that are carried out with cryptocurrencies. In addition, it saves the information of those transactions and it records absolutely everything, such as the time and location in which they have occurred
4. Harm the environment
FALSE. This myth has been growing because of the process of mining cryptocurrencies. Miners are not only those who are engaged in the mine profession. There is also the profession of cryptomining. What is it? " Cryptocurrency mining is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger".
Companies invest a lot of money in specific equipment to mine cryptocurrencies, and these equipment consume large amounts of electricity. This fact is what has led to the myth that cryptocurrencies harm the environment, as some people consider that requiring so much electricity can be harmful to it.
5. Blockchain technology and cryptocurrencies are the same
FALSE. Many people believe they are synonymous, but they are not. The blockchain is the technology on which a cryptocurrency is based. That is, the technology it uses. So, if you thought they were the same, it's not, but one—the cryptocurrency—uses the other—blockchain technology—to function.
What did you think of these myths? Did you think any of them were true? There are many people who have heard these myths and who therefore do not dare to use or invest in cryptocurrencies. If you are one of them forget about it, enter the world of cryptocurrencies and discover all its advantages.