You may have been trading in Bitcoins for a while, but you are likely to remember the mysteries and confusion surrounding this cryptocurrency when you first started out. For a newcomer, being able to differentiate between the blockchain and Bitcoins is far from easy.
Here are some of the common myths surrounding the Bitcoin that beginners should know about:
Bitcoin transactions are completely private
To start with, it is argued that Bitcoin transactions are completely private but the truth is that the Bitcoin is not really anonymous. You can use simple tools like block explorer and other software to view Bitcoin transactions. Bitcoin is known for immutable transparency that is a powerful safeguard against thefts, scams, and third-party tampering. In Bitcoin transactions, you will not be able to see who sent the money or to whom; rather you can view a Bitcoin address that comprises of a series of characters. Bitcoin is also traded autonomously; visit http://bitcoinera.app/de for more details about the autonomous trading software application.
Bitcoin is “based on thin air”
It has been argued by leaders like Donald Trump that the Bitcoin is not backed by anything and is “based on thin air”. However, this belief is slightly flawed because value will be subjective in nature. In short, a market is free to value what it wants and how it wants. Since the Bitcoin is known for being decentralized and assures faster transactions, people feel it has emerged out of thin air. Bitcoin’s supply is in fact limited; there can only be 21 million Bitcoins and no more.
Blockchain is synonymous with Bitcoin
It is also argued by some that the blockchain and Bitcoin are synonymous. The blockchain refers to a public ledger that has records of all transactions made in the Bitcoin network. These are verified by miners who use specialized computers for solving complex cryptographic problems successfully in return for which they get rewards as Bitcoin. The network may be decentralized and not overseen by a governmental institution or bank, and individuals may be able to run computers and verify the blockchain independently. In contrast, networks of governments or banks have centralized blockchains where the records of transactions are stored in centralized servers and approved parties can view and use the records. Bitcoin points to one such network using blockchain technology but the Bitcoin is not the same as this technology.
Bitcoin is for criminals
Some critics argue that Bitcoins only appeal to criminals, but this is not completely true because crime can be facilitated equally by fiat currencies.
Bitcoin is a get-rich-quick scheme
It is also believed that Bitcoins are for people looking for quick ways to become millionaires. But, the risks are great because there are scammers who try to use the Bitcoin network to their advantages. Bitcoin can at best be regarded as a tool that criminals can misuse but so are credit cards or bank accounts that are equally vulnerable to breaches and scams.
Bitcoin is for the tech-savvy
Finally, it is wrong to assume that only if you are technologically savvy, you can make money using the Bitcoin. As you take your first steps, you may feel intimated hearing terms like “halving”, “hash rates” etc. But the whole set up process is not that hard. You can simply download user-friendly wallets and get started. To send or receive Bitcoins, all you need to do is type in an address or scan a QR code.