- Bitcoin transactions are recorded on a transparent blockchain, offering privacy but not full anonymity.
- Bitcoin’s value stems from its scarcity, decentralized network, and utility in enabling peer-to-peer transactions.
- Despite its volatility, Bitcoin is increasingly viewed as a hedge against inflation and a digital store of value.
Bitcoin, the first decentralized digital currency that was introduced in the year 2009 has been trending. As it became popular, many beliefs have been created about it and people took it as a gospel truth. However, these untruths usually tend to mask BTC real reality. In the following section, we describe five of the most widespread myths concerning this digital currency:
Anonymity
One of the most popular myths is that by buying and selling goods and services through Bitcoin, one can stay beyond the reach of the law. The truth of the matter is that Bitcoin is anonymous, but it is not a hundred percent anonymous.
Bitcoin transactions are recorded in a data book called the blockchain. Although personal data is not directly connected to these transactions, the reason is that the blockchain is a public database and the data can be analyzed to determine the owners of the transactions.
BTC is Valueless
Furthermore, due to the fact that Bitcoin has no real-world counterpart, such as gold, people are inclined to think that it has no value. Nonetheless, there are several factors that make Bitcoins to have high value: scarcity, the network is decentralized, and it provides utility through P2P transfer of value with no intermediaries.
Furthermore, the use of Bitcoin is crucial with regard to the technology behind it, which is called the blockchain and is believed to serve a vast number of applications both in the public and private domains.
Bitcoin Criminal Involvement
Many people are convinced that Bitcoin has its connection with the darknet and other criminal activities. Despite the fact that the Bitcoin has been associated with criminal activities, it has been established that only a small percentage of the transaction carried out using the Bitcoin is connected to criminal Nature.
This is not entirely correct because majority of the Bitcoin transactions are legal and can involve factors such as investments, and purchase and sale of goods and services. Moreover, it has also been realized how the criminal activities can be tracked on the blockchain by law enforcement agencies.
Bitcoin is Volatile and cannot be Safely Stored
To this effect, the price volatility of Bitcoin has been of great concern when it comes to the use of Bitcoin as a store of value. It should be noted that the price of Bitcoin is rather volatile, though the currency has been showing steady growth in general. Some investors are using Bitcoin to hedge against inflation and others to store value much like they would gold. This can be broadly stated to be due to the fact that the market is relatively new and also the prices are still being discovered in the market.
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