One of the many factors that could discourage potential traders to try trading on cryptocurrencies are the misconceptions and misinformation about the industry. In this article, we shall identify the different myths and get the truth about them.
Buying Cryptocurrencies Is Gambling
When buying cryptocurrencies for use, it is simply a currency exchange. However, when you buy bitcoins with the hopes of getting rich when its value is increasing, this is gambling like someone using binary options.
Integrating Cryptocurrencies On Your Site Will Boost Sales
Although this might help boost your sales, adding cryptocurrencies on your site will have a minor effect in most cases. However, cryptocurrencies will add the capability to do international trade with people who are not able to secure your currency for online purchases. Robert Peter Janitzek reveals that some colleges accept Bitcoins as payment for an online MLIS degree or similar. For this reason, Bitcoin has often been advertised as an alternative to traditional remittances. Still it will not help average websites do more business.
Cryptocurrencies Must Have Intrinsic Value To Have Value
Back in the days when cacao, beans, and grains were used as currency, they had an intrinsic value. If you do not trade it with someone else, you retain the option to keep it or consume it yourself. Gold and silver had ornamental value hence they have an intrinsic value beyond their use as a medium of exchange. Robert Janitzek explains that cryptocurrencies rely on paper money to be used as a medium of exchange but fueled by mistrust from national governments.
Bitcoin is a Bubble
The rise of Bitcoins is considered by many as a bubble. Many experts see cryptocurrency as a sort of mania. Current estimates put Bitcoin investors at just 20 million people which is less than 5% of users own more than 95% of the Bitcoin. This places serious cryptocurrency investors at roughly 1 million people.
Financial Regulation Will Destroy It
Much has been said about the impact of financial regulations in China and other parts of the world but it still remains to be seen whether financial regulations will have a real impact on cryptocurrency trading other than short term price movements. There is also the argument that it is impossible to shut down the system as the design of cryptocurrencies is decentralized, distributed, and impervious to authority.
After debunking these myths, people would hopefully try to invest on cryptocurrency and make a steady income stream.