If there’s one thing in the FinTech space that has currently seized the attention of entrepreneurs, investors, and governments around the world more than anything else, it is Bitcoin. It has been one of the most trending topics on search engines and social media and in a nutshell, everyone has been talking about it for a while now.
Bitcoin is all set to disrupt the financial services landscape in new ways not seen since the advent of paper currency. However, when something soars this high and has a phenomenal growth rate of 1000+ percent in 12 months, myths and misconceptions are very likely to emerge around it.
Is this the right time to invest? Is Bitcoin safe? Is it legal? Will the Bitcoin bubble burst? These are some common myths doing the rounds that are making people sceptical about this new trend in the global financial market. In this article, we debunk the top five Bitcoin myths for what it is.
Myth No. 1: Bitcoins Are Illegal
The question surrounding Bitcoin’s legality is getting bigger and bigger with every passing day. This is mainly because governments across the globe haven’t yet come together to present their views and stance on cryptocurrencies, with each of them today having different positions on it. While some have accepted Bitcoin as a form of legal currency, there are others, who are thinking of banning it. But, you can be assured, Bitcoin is absolutely legal. Questions about its legality arise because till date the world has never seen a mass-accepted financial instrument not endorsed by a government body, and hence, the debate and confusion.
Myth No. 2: Bitcoin Is a Global Ponzi Scheme
A Ponzi scheme is basically a sham that makes payment to its investors with the money collected from later investors instead of profits earned by the scheme. The primary reason why Bitcoin doesn’t qualify to be a Ponzi scheme is that it is an open-source, peer-to-peer currency, with no governing entity leading and managing it. The profits from Bitcoin surges are not passed on at the expense of those joining the crypto bandwagon at a later date.
Myth No. 3: Bitcoin Aids Money Laundering and Tax Evasion
Many are of the opinion that Bitcoin can play an active role in various forms of illegal acts, such as tax evasions, money laundering, and terrorist funding. However, Bitcoin being a digital currency, is fully secure and trackable, and its transactions are completely transparent backed by the revolutionary Blockchain technology. On the contrary, there is no tracking system for FIAT currencies, and they don’t ensure sending and receiving money only from trusted sources as well. Whereas, the Blockchain technology is open to the public, which takes out the anonymity factor entirely. If, for instance, anonymous cash transactions can be successfully taxed, then why not Bitcoin? In any case, Bitcoin, and the cryptocurrency community as a whole is willing to get together with government authorities to expand its adoption. So, to argue that Bitcoin facilitates illegalities is not fair at all.