Bitcoins are illegal, they are useless, it’s a giant ponzi scheme and only drug dealers use them. These are just some of the few misconceptions surrounding Bitcoin.
Those who hear of Bitcoin usually aren’t familiar with cryptography and blockchain technology in general. As a result misconceptions about Bitcoin’s inner workings may arise as one’s intuitions takes over reality. We present the top 5 widely believed myths that are circulating about Bitcoin, hold on to your hats – its time to debunk them all. Bitcoin is a Ponzi Scheme
This is by far the most popular myth which suggests that Bitcoin is in fact simple a Ponzi Scheme and buying into it would only mean disappointment later. By definition a Ponzi Scheme is a fraudulent operation in which the operator solicits investors by making promises of unrealistic returns. The primary objective of a Ponzi Scheme is to lure in as many unsuspecting investors as possible, as they keep the operation running. As soon as new investors stop injecting capital into the scheme the whole pyramid falls apart.
In the case of Bitcoin there are no unrealistic returns being advertised for users or investors. In fact, the only return that Bitcoin promises is a return of full control over your finances. Bitcoin provides a way to instantaneously and securely transfer value over a global network available to all those who have access to the internet. While it’s true newbies who hop on the bitcoin bandwagon might cause a price surge which will benefit early adopters who are still holding coins, the early birds aren’t profiting at the expense of the new guys. Lastly since Bitcoin is decentralized by nature there is no central entity leading the scheme, which clearly debunks the myth that Bitcoin is a Ponzi Scheme. Bitcoins are backed by […]
