Cryptocurrencies are the hottest talk of the town these days
and they are everywhere. However, like every new innovation or discovery, there
are certain myths that surround cryptocurrencies. Ronish
Baxter, who is a cryptocurrency expert, sheds light on the top 5
myths related to cryptocurrency.
Cryptocurrencies have no value
There has always been a question about the value of
cryptocurrencies. Sceptics never let the opportunity to ridicule investors for
backing speculative, unregulated assets. But, the fact is that cryptos are
global, borderless currencies that fluctuate based on supply and demand.
Indeed, that it is cashless is why numerous supporters believe it is the future
of finance. Considering that the general trend around the world is a move
towards cashless societies, these digital assets are easily argued to be a far
better store of wealth. Also cryptos can’t just be inflated away via
quantitative easing like fiat currencies.
Cryptos are used for criminal activities
Cryptocurrencies are often viewed with a
suspicious eye because they are alleged to be linked with suspicious
activities. Many people believe, wrongly, that bitcoin and other cryptos
attract dark-web lurkers because of their anonymity. While users can be
pseudo-anonymous, every translation on the underlying blockchain is traceable,
by design. Ronish Baxter who has been keeping a close watch on the growth and
impact of cryptos states that “The majority of cryptocurrencies are not
entirely anonymous; in fact they have a layer of transparency that sets them
apart from physical commodities and cash.”Tokens and Coins are same
There is a common belief that cryptocurrency tokens and
coins are the same thing. Coins such as bitcoin have a tangible value that may
go up or down and can be wildly volatile in the markets while tokens are
designed as a utility, as opposed to a security, which facilitate access to
online goods and services.
Crypto transactions take huge time
It was calculated by Blockchain in December 2017 that one
bitcoin transaction takes on average 78 minutes. This can be frustratingly slow
and, worse, unreliable. But, not every crypto transaction takes the same time.
XRP, the token of Ripple, has a processing speed of just four seconds. Ripple
is able to complete 1,500 transactions per second. It is still some way of
Visa’s 24,000 transactions per second, but the technology is being improved
upon all the time.
The best long term investment is Bitcoin
The investment performance of Bitcoin depends on the entry
and exit time, just like any other financial asset. But there is more to it
than that. It is estimated there are now around 1,600 cryptocurrencies and,
although they can all be traced back to Bitcoin, many are far superior in
technological terms. Other crypto projects have improved upon bitcoin’s
sluggish transaction speed and solved its scalability concerns. If
cryptocurrencies are widely accepted by financial institutions, bitcoin is likely
to be left behind. Investors are aware of this.
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