When considering the last two years, it is evident that cryptocurrencies are becoming more and more well-known. More people than ever are aware of them and are engaged with them in some way.
Even so, you would be shocked at how many individuals are ignorant about or uninterested in cryptocurrencies, particularly if you have been actively involved in this field for some time. Although exact figures are unavailable, my estimation is that it represents little more than 0.5% of the world's population.
It's safe to conclude, therefore, that this is a relatively new industry, and that everyone of us is an early adopter of a technology that could grow to be at least as large as the internet. Anyway, it is quite common that "normal people" only have a limited or no understanding of this market because it is all so new.
For the longest time, there have been many fallacies about cryptocurrencies since, as they say, ignorance is dangerous. It seems like even well-known people like Warren Buffett are completely wrong. These are some common misconceptions about cryptocurrency that people have.
Since they are not supported by anything, they lack intrinsic value.
The most common misconception I hear is that cryptocurrencies are just made up, and as such, there is no justification for their value.
They fail to realize that cryptocurrencies are built using a kind of blockchain and algorithms, and just because they aren't printed by a central authority as we are used to doesn't imply they shouldn't be valuable. Like everything else, their value is decided by the free market process.
Let's also use the US dollar as an illustration. It used to be backed by gold, but that isn't the case anymore. It is therefore no longer supported by anything other than the US government's confidence and credit. For many, that equates to squat! However, the value of the money is still derived from the public's faith in it.
They Are Exclusively Employed in Illegal Pursuits
"Only" is the key word in this context. Perhaps in the past, a significant portion of cryptocurrency use was used for criminal operations, but in recent years, the roles have reversed and just a small portion of cryptocurrency use has been for such illicit activities.
These days, merchants use cryptocurrencies for value storage, trading, and payment settlements. Institutional players have recently begun to dabble in the market, which will only increase the variety of uses for cryptocurrencies.
Additionally, keep in mind that fiat currencies are used to finance the majority of illicit activities worldwide. Not that we go around outlawing them, do we?
You Must Purchase The Entire Bitcoin or Crypto
I also keep hearing from people about this one. When they see that a bitcoin costs $4000, they automatically think that it will cost them $4000 to purchase one and enter the cryptocurrency realm.
If you want to test the waters first, you can purchase fractions of any cryptocurrency (for example, 0.001 Btc) and invest as much as you wish.
They're Scams
Not just the general public, but even some prominent clergy members believe that Bitcoin and similar platforms are nothing more than pyramid schemes. Actually, the Indian finance minister had stated precisely the same thing during his budget statement the previous year.
However, this is not even close to the reality. In a ponzi scheme, you would pay someone money under the false pretenses of receiving huge returns, and they would later steal your money and go.
What makes something like Bitcoin a ponzi scam when no one is requesting your money or paying you anything in return? Since everything is decentralized, no one individual or group is attempting to steal your money.
Granted, a portion of cryptocurrencies and projects may be Ponzi scams, but this does not imply that the industry as a whole is. Ponzi schemes, after all, are frequently executed using currency. Is fiat now considered a Ponzi scheme?
Governments Have the Power to Close Them Down
Many individuals worry that any moment the government may intervene and take down the networks supporting cryptocurrency.
As was already mentioned, no single entity, be it company or individual, is in charge of a given coin. Additionally, because a coin has a single point of operation, unlike some other centralised systems, such as Facebook, it can remain operational as long as it is sufficiently dispersed.
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