Considering the rapid success and prominence of the digital asset industry, specifically the cryptocurrency marketplace, it is safe to say that digital currency trading is here to stay. After all, in terms of market capitalisation, the crypto industry has surpassed the $1 trillion mark. There’s no question that cryptocurrency investment has become a popular means to earn profits, generate a passive income, and conduct business all over the globe.
However, at the same time, it is fair to say that the concept and technology powering cryptos and blockchain is complex and comes with a deep technical learning curve. Combined with global popularity, it isn’t surprising to see that there are plenty of common myths that surround cryptocurrency in general. For example, some folks believe that yield farming is a hoax, while some say that digital currencies are overvalued.
In light of this, we’re going to shed some light on some of the most common myths revolving around cryptocurrencies and debunk them so that you can get some peace of mind. So without further ado, here goes.
Top 6 Crypto Myths Debunked
Myth 1- Digital Currencies are Only Used By Tech Savvy and Affluent Individuals
There’s not an iota of truth in this. As a matter of fact, one of the primary reasons why digital currencies were invented was to enable common people to invest in unregulated digital assets without any scrutiny or the fear of having to pay heavy taxes and transactional fees commonly associated with the traditional financial ecosystem.
So, when it comes to DeFi crypto, rest assured you won’t have to be worried about going through third-party government regulators, paying fees levied by financial institutions, etc. Sure, understanding decentralising blockchain and digital currencies can be a bit overwhelming and requires technical knowledge, but the underlying concept is easy to grasp.
In addition, over the past couple of years, digital currencies have been shown to disrupt the traditional financial marketplace by introducing various cutting-edge trading solutions, such as decentralised crypto exchanges, P2P trade networks, and much more. It is easier to find the best crypto to buy now than ever!
Myth 2 – Cryptocurrency is an Overvalued Industry and is Going to Disappear Soon
Some say that the digital currency sector is just a hype or a temporary albeit overvalued craze that is going to die down soon. Completely false. Major cryptocurrencies such as Bitcoin, Ethereum, and many other popular altcoins aren’t going anywhere because there’s always going to be a demand for them.
You see, nowadays, thanks to blockchain and crypto, people have the autonomy to control their finances and grow their wealth without any looming federal scrutiny. There will always be demand for the capability to move digital assets at rapid speeds and with mouth-watering affordability. Keep in mind that stablecoins are always going to be self-contained.
Myth 3 – I Should Have Invested in Cryptocurrency Sooner
Not true. While Bitcoin is one of the most famous and well-sought-after digital currencies, it is essential to know that it was launched as recently as 2008! Sure, Bitcoin was the catalyst of the blockchain universe, but it is equally valid that the industry itself is still in its infancy.
Moreover, many popular altcoins are launched frequently, and each project comes with its own unique set of functionalities and real-world use cases. In all, it’s never too late to invest in farm finance, no matter what.
Myth 4 – Virtual Currency is Nothing But a Big Hoax
Look, it’s illogical to think that there aren’t going to be any advantages and disadvantages associated with any financial sector, traditional or otherwise. Every time an investor looks for the best crypto to invest in legally, there’s always going to be a bad actor or a cybercriminal attempting to make money from crypto illegally.
However, today, investors have become more research-focused. They carry out extensive due diligence and approach investing in digital assets with a more conservative frame of mind. It is essential to overanalyse your plans and decisions no matter how big or small of an investment it is.
Moreover, virtual currencies are also unlikely to be a hoax because the industry hasn’t been subject to federal laws and regulations. At the same time, governments all over the world haven’t outlawed blockchain and cryptocurrencies. As long as you carry out your research and assess your risk-benefit ratio, there’s no reason you won’t succeed in bagging some hefty profits.
Myth 5 – Digital Currencies Do Not Offer Any Security
Bitcoin was the first virtual currency to offer investors the opportunity to engage in “trustless” crypto and DeFi yield investments, offering peer-to-peer platforms to conduct digital trades. Moreover, it was also the platform that gave birth to the blockchain stratosphere, which is primarily a distributed public ledger technology.
These distributed ledgers are designed to have foolproof security protocols and are heavily encrypted, utilising an enormous amount of computing technology and power. The demand for decentralisation will always come with a need for state-of-the-art security and encrypted smart contracts. But you’d be amazed to know that despite what people think, the Bitcoin network is yet to be infiltrated or hacked.
And instances where you may have heard the phrase blockchain or crypto hacking in the news or articles, are generally associated with data breaches that occur on third-party software, businesses, or services that are utilising specific crypto. This is why it is essential to select the best DAX (decentralised exchanges) when buying and selling digital currencies. Plus, blockchain offers encrypted digital vaults you can use to store all your virtual assets.
Myth 6 – Investing in Cryptocurrencies is the Same as Buying a Lottery Ticket
While digital currency investments are not entirely a gamble, they do come with varying levels of volatility in line with inflation. And yes, digital currencies have been subject to huge price fluctuations for the past ten years owing to both inflation and the fact that the crypto industry is still in its infancy.
Just like investing in the stock market or investing in any other commodity comes with a degree of risk, the crypto industry is not immune to speculation. However, there are several different investment methodologies and risk-mitigating strategies you can use to maximise your profits and APY (annual percentage yield).
All in all, when it comes to investing in digital currencies, it is strongly recommended that you seek expert consultation and do a lot of due diligence before taking a final decision.
