Bitcoin is one of the coolest cryptocurrencies out there. It provides complete anonymity and liquidity to the users. The currency first came into circulation in 2009 and has survived numerous attacks since then.
The terms used by the Bitcoin community are quite interesting and can evoke misleading images and ideas in public’s minds. All that mix-up results in skepticism which ultimately stops people from having a clear understanding as to what is Bitcoin and how to use it.
In this article, we have addressed the things that most people find confusing and misleading about Bitcoin. And we hope that it will help eradicate all the doubts in your mind and encourage you to invest in this incredible form of currency.
Common Misconceptions About Bitcoin:
The Currency Comprises of Gold Coins:
The first misconception that people have about Bitcoin is that it comprises of gold coins. And we can’t blame them. Because every time you want to fin bitcoin-related information, the results always exhibit a coin with the letter B and two vertical bars resembling the USD.
To your surprise, Bitcoin has no physical shape and only exists on immensely secured computers in the form of encrypted code. In other words, it’s a virtual currency and all the images you see are false.
You Keep Bitcoins in A Wallet:
When talking about Bitcoin wallet address, most people think that they are physical purses with sections to carry cash. But this is not the case with Bitcoin wallets.
The wallets store coins virtually. There is no physical way to use those wallets which leave the owners with a very few security risks.
In addition, the Bitcoin wallets use encrypted keys for coin protection and only the owner can have access to it – unless he/she decides to publicize the key.
Bitcoin Is Based on a Debit System:
Another misconception about Bitcoin info is that it works on a debit system. Meaning that you can spend the coins you don’t have. However, Bitcoin doesn’t work this way.
The currency uses a system called Unspent Transaction Output. The system enables the network to work out a user’s balance and authorize a transaction based on the number of coins available.
Miners Dig for Gold Coins:
A process called Bitcoin mining is the primary source of digging coins. However, the mining does not involve men using pickaxes to dig gold. It’s actually a network of computers where miners from around the world connect with each other through mining programs and work on solving mathematical algorithms.
Those who successfully solve the problems are then rewarded with bitcoins.
Bitcoin Is a Currency for Criminals:
The fact that Bitcoin offers complete anonymity often raises doubts in people’s minds that the currency is designed for criminals. Although this feature attracts a large number of criminals, the majority only use it for daily life transactions.
These are some Bitcoin-related misconceptions among the general public. It’s usually the beginners or people who have never been to the Bitcoin world where the false information originates. If you want to clear doubts, get in touch with an experienced user and do an extensive research on the topic.
Read our article on top 5 myths about Bitcoin.