Top 10 Myths about Cryptocurrencies to Debunk in 2023

For many, cryptocurrencies might turn out to be a massive speculative bubble and investing in the same might not be that easy as it might sound. Though there are countless investors making good returns out of their investment from the cryptocurrency market, the world of cryptocurrencies is relatively new and is widely misunderstood. This has resulted in many myths pertaining to cryptos. Taking this into account, have a look at the top 10 myths about cryptocurrencies to debunk in 2023.

Cryptos are only for seasoned investors

Many people are of the firm belief that digital currencies are exclusively designed for seasoned investors. However, this is entirely false. This is because, one of the major goals of developing the idea of a decentralized currency is to give ordinary people more power and democratize the financial system by getting rid of intermediaries like government agencies and financial organizations.

Crypto Gains Aren't Taxed

You wish this to be true. However, this misconception needs to be cleared. There's always a way to track gains and losses and therefore your cryptocurrency investments would be taxed.

Cryptocurrencies are immaterial

This is perhaps one of the biggest myths about cryptocurrencies. People assume that there is no material asset that is backing cryptocurrencies. However, what cannot go unnoticed is the fact that people who trade in cryptocurrencies believe in their inherent value. With investors believing and understanding the value of cryptocurrencies, it is quite tough for them to assume that cryptos are immaterial.

Cryptos are used for illicit activities only

Many people across the globe tend to assume that cryptocurrencies are used for illegal activities. Yes, digital currencies have been used by individuals with nefarious goals in mind, but the fact that the number of cryptocurrency transactions related to illicit activities being quite minimal cannot be denied. Most of the cryptocurrency transactions are conducted with legitimate and legal intentions.

Cryptos is a bubble that'll burst soon

Yet another prevalent myth is that cryptocurrencies are just the latest fad or gimmick, which will pass. The reason is quite simple – there are countless people who desire a lot of control over their money and a mechanism to send money around the world quickly and cheaply.

Cryptocurrencies are not secure

As known to many, the key technology behind cryptocurrency is that of a blockchain which is a distributed database secured with encryption techniques and technology that is very difficult to break. The security as a result of encryption throws light on why trading cryptocurrencies is safe and not big a concern.

Cryptos are clean and green

This sounds good but is a myth that one cannot let go. The computer power required for proof-of-work mining consumes loads of electricity – as good as the amount capable of powering countries. If reports are to be believed, the world's crypto mines consume enough energy annually to power Sweden for one year.

Cryptocurrencies will displace the dollar

There are business leaders with a firm belief that the era of digital currencies could end the dollar's reign or might pose as a threat at least. However, a point to note is that cryptocurrencies are not backed by anything other than the faith of the people who own them. So, the very question of whether cryptos can overpower dollars or not becomes immaterial.

Crypto is nothing but a scam

Every industry has its own positives and negatives. As far as the cryptocurrency market is concerned, every time an investor searches for a legal way to make money, a fraudster is also seeking a way to take advantage of them. As a result, investors are more prone to be cautious and overanalyze each choice when it comes to crypto investments.

A lot of countries have legalised crypto which is why it is safe to conclude that cryptocurrencies are not illegal.

Crypto transactions can't be traced and are anonymous

A blockchain keeps a record of everything. Although there is some anonymity, it is still possible to identify users and their information in some circumstances. So, there is user anonymity, but it's not entirely assured, just like on other platforms.