7 Crypto Tips To Know About: Common Myths And Facts

by Allen Brown
October 22, 2022
in Uncategorized
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When it comes to cryptocurrency, there are a lot of myths floating around. It can be difficult to know what to believe and what not to believe. This post will discuss a few of cryptocurrency’s most common myths and facts, hopefully helping you to understand this topic better.

Myth 1: You Can’t Spend Your Crypto Anywhere

The most prevalent myth surrounding the crypto industry is that they have zero utility, and you can’t use them for anything. Although this might have been true in the past, nowadays, you have a plethora of options to spend your tokens as you see fit. Moreover, you can use almost any viable token if it has enough liquidity and is in demand. For instance, you can use Solana gambling sites, Bitcoin ATMs, and even spend your SHIB in its own metaverse (although that might not be such a great idea because…well, SHIB). Nevertheless, the point is that while spending your spare crypto might not be as straightforward as using fiat currency, it is far from impossible.

Myth 2: Crypto Is A Hedge Against Financial Uncertainty

Before the start of this year, numerous pundits were extolling the virtues of cryptocurrencies being a great hedge against financial instability and uncertainty. However, 2022 rolled around and decided to upend almost every truism related to finance. Since the start of this year, nearly all cryptos have seen a massive sell-off and closely followed the downturn in established markets, turning what was a bullish 2021 into a bear of all bears (and getting worse). While this isn’t a commentary against investing in crypto, it is a warning that there is no such thing as a sure thing, and what goes up usually comes down, especially in finance. Nonetheless, if you have the stomach for risk, there are plenty of fantastic bargains to be had as long as you heed the following advice:

1. Understand the risks involved: Although every investment incurs risk, cryptocurrency is more volatile than most.
2. Read the whitepaper: A whitepaper outlines a crypto token’s reason for being; its raison d’etre. It might be a good investment if you like what the team plans to do with their offering.
3. Learn technical analysis: Technical analysis tends to be more beneficial than fundamental analysis when it comes to crypto because they are more of a speculative play rather than a practical one.

Myth 3: Cryptocurrencies Are A Fad

When BTC arrived on the scene, there were plenty of calls that crypto was merely a passing fad. Moreover, there are stories of people using their BTC to buy pizza and so on when it was worth only a few dollars! However, the time has shown that they are far more than a passing trend and firmly here to stay. The reason is that the underlying blockchain tech has the potential (and is currently being used) for numerous real-world applications.

Myth 4: They Are Only Used For Illegal Activity

Along with the chorus proclaiming it to be a fad, many of the same commentators also claimed that they are only used for illicit activity. However, most of these accusations came from uncovering The Silk Road in the dark web that used Bitcoin to fund operations. While it is still used today for various online scams and nefarious purposes, its use goes far beyond that.

Myth 5: They Are Bad For The Environment

This myth has a little explaining to do before dispelling it. Although when they were first developed, most cryptocurrencies used proof of work (PoW) to create new tokens, many have now switched to what is known as proof of stake (PoS). PoW is more energy-intensive than PoS, which contributed to this misconception. However, energy demands will likely decrease with Etherium finally transitioning to PoS. Nevertheless, the elephant in the room remains Bitcoin which still utilizes PoW for new tokens, and this doesn’t look like it will change since there is no absolute authority behind BTC. Despite this, most people are moving to more modern alternatives, which should help in the long run.

Myth 6: They Are A Scam

For those unaware of what a pump and dump is, it is essentially when an entity promotes something to a fever pitch until it reaches record valuation, only to sell everything and leave others holding the bag. This has been especially prevalent in the crypto world, which has unfortunately tarnished its reputation. However, this isn’t as common as you might think, and with proper due diligence, you can avoid becoming a victim of this scam. You shouldn’t have any problems if you approach it like any other investment and not a “get rich quick” scheme.

Myth 7: They’re Insecure

There have been plenty of stores covering various hacks and thefts of crypto assets over the years, but they all tend to share one common theme; they were stolen from exchanges and not wallets. However, the security of cryptocurrencies is based on the underlying blockchains they use to store information about transactions and balances. The blockchains are secured by various cryptographic algorithms, which take an input and turn it into an almost impossible-to-decipher code. Therefore, as long as you use a secure wallet to store your tokens, you will have less risk of theft than you would with a conventional bank.

Cryptocurrency can be your friend and your enemy, but like any new thing, there are plenty of misconceptions swirling around. However, as you can see from this post, they are easily debunked. If you treat it as you would any other investment, stay away from anything that seems too good to be true, you should be perfectly fine buying and using your crypto as you desire.

Tags: Bitcoin ATM, BTC, crypto, Crypto Tips, cryptocasinos, Cryptocurrency Scam, Pump-and-Dump, Risk, secure wallet, Silk ROad, technical analysis, volatile

1 Discussion on “7 Crypto Tips To Know About: Common Myths And Facts”

amanda lawrance says:

January 29, 2023 at 3:18 am

Cryptocurrency exchange websites https://exolix.com/ provide users with the opportunity to buy and sell digital money. The most popular currencies on the market are Bitcoin and Ethereum. However, there are several other cryptocurrencies to choose from. Before deciding which one to use, make sure you have an understanding of how they work.

7 Crypto Tips To Know About: Common Myths And Facts

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7 Crypto Tips To Know About: Common Myths And Facts

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