Five cryptocurrency myths you need to stop believing

Cryptocurrency has gained interest among many individuals as they see the benefits of investing.

Like any other investment, a few people have been unlucky in getting results simply because of a lack of knowledge.

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Due to the volatile and complicated nature of the crypto industry, a lot of myths have been associated with it. Below are the five most discussed myths.

Bitcoin is the only cryptocurrency worth investing in

To be honest, Bitcoin is one of the most popular and valuable cryptocurrencies. It has proven to have great returns. However, there are other coins worth investing in. There are now dozens of alternatives for investors to choose from.

Ethereum, Solana, and Polkadot are just a few of the many coins available for people to invest in, each of which has had success and seen great returns.

All altcoins have unique features, from privacy to smart contract capabilities, and offer various options for investors. Some of these altcoins also provide faster and cheaper transaction fees than Bitcoin.

Investing in multiple coins can also help investors diversify their portfolios, reducing the risk of losses due to market volatility. Do your research, monitor how popular coins perform, and invest in the best ones.

All cryptocurrencies are volatile

While some coins may experience dramatic price fluctuations, others remain relatively stable, especially those designed to be used as a payment mode, such as Bitcoin Cash, Litecoin, and Dash.

Also, some cryptocurrencies are designed to act as digital stores of value and investment vehicles. These include Bitcoin, Ethereum, and Ripple. While these cryptocurrencies can experience high price volatility, plenty of people live off the returns they make on their investments in these assets.

Moreover, a growing number of "stablecoins" are pegged to a fiat currency or other assets like gold and silver. These stablecoins are specifically designed to be less volatile than other cryptocurrencies, offering investors an opportunity to enter the crypto market without the risk of extreme price swings.

Cryptocurrencies are not accepted as a form of payment

Many stores and retailers have recently started accepting cryptocurrency as a payment mode. While not all stores accept this mode of payment, this is quickly changing as more businesses become familiar with the idea of digital currencies.

Many online and physical stores have started offering crypto payments, including retail giants like Microsoft, Burger King, KFC, Twitch, Pizza Hut, Amazon, and Subway.

There are also digital payment platforms such as PayPal and Stripe that allow merchants to accept cryptocurrencies as payment. This has made it even easier for customers to pay with crypto, as they don't need to leave their wallets or exchange their coins for another currency.

The number of places and stores where cryptocurrency can transact grows daily. The acceptance rate will increase as more businesses and individuals become comfortable with digital currency and its associated technology.

Only criminals use cryptocurrency

The myth that only criminals use cryptocurrency has existed for quite some time.

This misconception is based on the fact that cryptocurrency transactions are anonymous and untraceable. This allows criminals to avoid detection and scam people off their hard-earned money.

In reality, cryptocurrencies are widely used. In fact, major banks and financial institutions are investing in crypto, and governments worldwide are beginning to embrace the technology.

This means that more and more genuine businesses are accepting cryptocurrency as a payment method. Individuals are also using crypto to save and store their money.

Cryptocurrency exchanges are also becoming more compliant with government regulations. This means that they can now identify and fight money laundering activities. Those looking to use cryptocurrency for illicit purposes will find it difficult to do so.

All stablecoins are backed by US dollars

Stablecoins were created to integrate the speed and convenience of digital payment systems with the security of conventional payment methods. While some of the largest and most popular coins, such as USDT, are backed by US dollars, others are backed by other assets, such as gold.

Other coins also use an algorithm to control the supply. For example, the Gemini Dollar (GUSD) is backed by US dollars held at the State Department Federal Reserve Bank and stored in a regulated trust company.

Other stablecoins, such as DAI and TrueUSD, are backed by a basket of other assets, such as gold, commodities, or even other cryptocurrencies.

Note that some coins may be more volatile than others. For example, while US dollars back USDT, its value can still fluctuate depending on demand and supply. This means that it is not entirely risk free. Therefore, it's wise to diversify your portfolio with different cryptocurrencies.

Conclusion

Cryptocurrency has the potential to revolutionise the financial system, but it is important to understand the myths surrounding it. Through research, investors can make informed decisions and maximise their returns.