What are the Major Misconceptions About Bitcoins?

April 14, 2021

Do you always feel confused about whether you should invest in bitcoins or not? You might have lots of rumours about the lack of security and growing bitcoin price fluctuations with each passing day. Well, you are not the first person who has many misconceptions about bitcoin. Since bitcoin is the latest discovery, it is quite normal for people to have misconceptions about these digital currencies. 

You don’t need to worry, as this article will help you in getting rid of some of the common misconceptions about bitcoins. With the rise in the popularity of bitcoins, misconceptions are also at an all-time high. If you want to make an investment in bitcoins, it is highly important to get rid of these misconceptions. One can invest in bitcoins using The News Spy

So, are you ready to get rid of these misconceptions? 

Bitcoins and anonymity

Well, if people tell you that bitcoins are completely anonymous, you don’t need to trust them. It may seem that bitcoins are anonymous when you use them initially, but you need to be very clear that bitcoins are not 100% anonymous. The blockchain technology that runs the bitcoin is made on a public network. Thus, anyone can know the transactions that you are making in bitcoin. If a person has deep knowledge and understanding, he/she can decode your spending and income in bitcoin. 

Thus, frankly speaking, bitcoins are pseudo-anonymous. This means that is it not 100% anonymous, but it offers high levels of anonymity as compared to the use of traditional currencies. 

The bitcoin system is made private, and thus, it can be quite difficult for an observer to know exactly what you are doing with bitcoins. But, as per many studies, it is being said that the future innovation in technology and upgradation in bitcoin technology can make it quite difficult for anyone to get even a single detail about the use of bitcoins.

Is bitcoin a scam?

Well, this is one of the biggest misconceptions about bitcoins. Every day, you may hear that bitcoin is a scam, and you should not make an investment. No doubt, many people are duped on the pretext of making an investment in bitcoins. But, if you pay close attention and if you keep your eyes and ears open, you will know that bitcoin is not a scam.

Bitcoin is a digital currency that is not controlled by anyone. Many people called bitcoin to be a new type of pyramid scheme. But, there is no truth in all these versions. As a currency, bitcoin works in the same way as other currencies, and it’s just that it uses a digital format of usage and investment. 

There are certain loopholes associated with bitcoins, but it does not mean that bitcoin is a total scam. Bitcoin has been in the news for all wrong reasons, but you can’t call it a scam. You need to be aware of the scams that people carry on in the name of bitcoin so that you don’t get duped.

Some of the major activities that you need to be aware of include phishing, social engineering, and different types of hacking. If someone is giving you totally different information about bitcoin, like you will be a millionaire in a single day, you don’t need to respond to all these policies. Never give away your private bitcoin wallet keys to anyone you don’t know. If you will keep your eyes and ears open, there is no way possible that bitcoin will feel like a scam to you.

Bitcoin and the encryption

This is the most common misconception related to bitcoins. You should be very clear that bitcoin doesn’t use any type of encryption. Every peer-to-peer network needs to know and understand the transaction, and they have to make sure that the transactions are real. Thus, get rid of the information that says that bitcoins use encryption. Bitcoin works by using digital signature and hash functions. No doubt, some signatures use the encryption method. But, this does not mean that bitcoins are encrypted.

With the arrival of new technology like bitcoin, it can be quite normal for people to have certain misconceptions. That’s the reason you should try to get adequate knowledge and information before you make any investment in bitcoins.

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