7 Bitcoin Rumors (Debunked!)

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Bitcoin is a crypto currency that has been in circulation since 2009 and been a subject of fierce debate since its inception. Whether you are a fan or an opponent of Bitcoin, no one can deny its incredible success. Bitcoin has just reached over $130 billion in market value; and its success has put it in the spotlight for reasons both good and bad since it began circulation. Below are seven unfounded myths that have been circulated about Bitcoin since its inception.

1: Bitcoin is a ‘Ponzi Scheme’ 

Since its creation in 2009, Bitcoin’s primary criticism has been from sceptics calling it a pyramid scheme. Two years ago, a chief economist, Tendayi Kapfidze, declared that he thought “… Bitcoin is nothing more than a pyramid scheme.” This is Bitcoin’s easiest and most frequent attack, as saying it without actual fact to back it up is so easy; and it often comes from economists or government officials who wish to undermine it without research. 

In 2014, Kaushik Basu, former Chief Economist of the World Bank and Professor of Economics at Cornell University, wrote that, “Bitcoin is not a deliberate Ponzi. And there is little to learn by treating it as such. The main value of Bitcoin may, in retrospect, turn out to be the lessons it offers to central banks on the prospects of electronic currency, and on how to enhance efficiency and cut transactions cost.” This was written after extensive research on his part, and there is much more to learn from his research than from thrown about quotes from people trying to undermine Bitcoin as a currency. 

2: Bitcoin Can Be Hacked and is Unsecure 

The rumour that Bitcoin is easily hacked is one of the few criticisms of the currency that is completely not true. Bitcoin itself has never been hacked, but the trading platforms online that facilitate the back and forth of cryptocurrency have been. Bitcoin’s biggest critics equate these two platform’s securities which is entirely unfounded as Bitcoin has never been hacked in its history. Bitcoin is a secure open-source software that has never been breached by hackers. 

3: Bitcoin Is Used Specifically for Money Laundering – 

When Bitcoin’s value went through the roof in early 2017, banks and politicians became increasingly critical of Bitcoin, doing everything they could to find a fault. They labelled Bitcoin as the ‘currency of dirty money’. Now, Bitcoin is not used specifically for laundering dirty money, and recently there have been attempts to minimise the ability to do so. 

Funnily enough, banks are more often used to launder money, and Danish and Swiss banks have found themselves in hot water in the past for doing so. In short, if people want to launder money, they are going to find a way to do so, whether that is through crypto currency or through banks. 

4: Bitcoin is Illegal – 

A bit subject of debate is whether Bitcoin is or cold ever be considered as legal tender. Though Bitcoin is not technically classified as legal tender by way of street value, it is not illegal. Bitcoin is instead classified as virtual currency, not illegal by any stretch. Bitcoin is actually recognised by the US Financial Crimes Enforcement Network as such. Though Bitcoin sometimes falls into an undefined grey area, it is not illegal.

5: Bitcoin Encourages Tax Evasion – 

This argument is weak, but it has been said in the past that Bitcoin encourages tax evasion and avoidance. Similarly to my earlier comment about money laundering however, if people are going to conduct tax evasion; they will find a way to do so. Tax can be evaded through banks just as easily as through Bitcoin…so it is hardy a solid argument against Cryptocurrency. 

6: Bitcoin has Zero Intrinsic Value – 

It has always been debated whether or not Bitcoin actually has intrinsic value as money does or not. But the intrinsic value of money itself only exists because of the current society we live in and government we run under. At the end of it all, value is only decided by popular supply and demand. If Bitcoin usage increases, so will its intrinsic value, which does exist. 

7: Bitcoin is an Ecological Enemy – 

Bitcoin’s value lies in the amount of energy it takes to secure it. Its critics have been quick to point out that mining Bitcoin Blockchain takes up a large amount of electrical energy. However, Bitcoin’s intrinsic value exists partially because of the power consumption required to produce them. However, it is possible to mine Bitcoin using renewable energy sources; which could actually help environmental causes and not hinder them.

Its presence in the spotlight has led to many unfounded Bitcoin myths which taint its reputation. In this article, I have aimed to debunk seven myths surrounding Bitcoin by proving that they are not all based on actual facts, and that many of them are based on rumour alone. Though there are absolutely some darker and less then legal sides to bitcoin, and definite downsides; not all the rumours are true. 

About the Author:

Elizabeth Hines is a digital marketing manager and article writer at Boom Essays and Essayroo. Her technology and business-related articles detail many of the latest tech innovations and marketing trends. She also writes for online magazines such as OX Essays.

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