Debunking Crypto Myths: What’s Real and What’s Just Noise?

Cryptocurrency is a growing niche and a hot topic in today’s world. Haven’t you heard about Crypto yet? That’s unfortunate. Or maybe you’ve heard about it but decided to stay away because it seems too “techy”? That’s even more unfortunate. In this blog, we will explore the common myths about Crypto and tell you why they are false.

Myth 1: "Investing in Crypto Is a Surefire Way to Get Rich"

Why it is False:

While there are stories of people getting super rich overnight, this is not the whole picture. The Crypto market is notoriously volatile, and prices can swing widely within a very short period of time. 

Many individuals have made substantial profits in Cryptocurrency, but it's likely that even more have experienced losses due to a lack of understanding when entering this space.

The key to surviving and thriving in this space is knowledge and experience. Without these two, you have to be really lucky to earn a fortune from this field. Even if you have earned a significant amount of wealth, your wealth may be short-lived if you don’t learn to manage that wealth properly.  

While Crypto can be a really rewarding space, we also have to remember that it carries significant risks.

If you don’t know when to cash out or when to exit the market, you could lose your investment. Moreover, scams are rampant in this sector, and without proper research, you could easily fall victim.

To put simply, if you are too lazy to learn about this space or if you cling to a fixed mindset, then the chances of survival in this space are low. 

Myth 2: "Cryptocurrency Is Only for Tech Experts"

Why It’s False:

While it's true that Cryptocurrency revolves around technology and its applications for solving real-world problems, it’s a misconception to think you must be a tech expert to enter this space.

If you're developing a Crypto project on your own, then yes, technical expertise is crucial. However, the cryptocurrency ecosystem also includes trading and investing, much like the stock market. You don’t have to be a business owner or CEO to invest in stocks, right? Similarly, you don’t need to be a tech expert to trade or invest in cryptocurrencies.

In Cryptocurrency, there are some technical concepts that you need to grasp to build a solid foundation. The good news is that these concepts can be learned easily if you take the time. If you know how to use your smartphone, then learning about Crypto won’t be much of a challenge.

Simple tasks like setting up an account on an exchange, buying a small amount of Crypto, and learning about Cryptocurrencies, Crypto wallets, blockchain, and experimenting with basic transactions aren’t rocket science. These foundational skills will help you navigate the space with confidence.

In fact, there are plenty of resources available on YouTube and learning platforms like Binance Academy and Coinbase Learn, which are dedicated to helping you learn about Crypto. You can also find simple explanations and analogies in my blog to make the learning process even easier!

Myth 3: "It’s Too Late to Get into Crypto World"

Why It’s False:

Many people thought it was too late to invest in the stock market decades ago. This perception is similar when it comes to Crypto. Cryptocurrency has already demonstrated the potential benefits of adopting blockchain technology over the past few years. However, we are still at the beginning of the adoption phase.

Many countries have yet to consider regulations for Cryptocurrencies, while the Western world is gradually implementing such regulations. Concepts like DeFi, DePIN, RWA, and Web 3.0 are still in their early stages of development.

As of 2024, only 6.8% of the global population is engaged in cryptocurrencies. My guess is that the actual numbers are even lower. Why? Because these figures are largely determined by the number of unique wallet addresses.

But guess what? Even a single person can have many unique wallet addresses. I don’t know about others, but I personally do.

Myth 4: "Crypto Transactions Are Completely Anonymous"

Why It’s False:

This belief is partially true. Cryptocurrencies like Bitcoin and Ethereum are only providing Pseudonymity for the transactions. This means that a specific user’s transactions on a blockchain are represented by a unique wallet address instead of their real identities.

But with enough data analysis, law enforcement agencies can trace back a user’s activities on a blockchain and find their real identities especially if a user has already provided KYC requirements on a centralized exchange or revealed their identity on a blockchain in any way.

So, it is a misconception to think that Crypto transactions are completely anonymous. But yes, we do have Crypto projects like Monero and Zcash that provide greater privacy and anonymity. Transactions happening in these blockchains are designed to be untraceable and private. But no system is entirely foolproof right? 

Myth 5: "Bitcoin and Other Cryptocurrencies Are Only used by Criminals"

Why It’s False:

This myth persists due to Bitcoin’s early association with illicit activities on dark web platforms. But today, that perception doesn’t match reality. Every Bitcoin transaction is recorded on a public ledger, meaning transactions are transparent and with a bit of investigation, traceable. 

In fact, a 2020 Chainalysis report found that less than 1% of all Bitcoin transactions were linked to illicit activities.

Nowadays we have Crypto exchange-traded funds (ETFs) provided by giant asset management companies like Black Rock, Fidelity, Grayscale, VanEck, etc. Companies like Visa, Mastercard and PayPal work closely with the Cryptocurrency space.

Countries like El Salvador have made Bitcoin a Legal tender and added Bitcoin to its national reserves. Over time, other countries may also follow suit, potentially adding Bitcoin to their sovereign reserves.

Myth 6: "Cryptocurrencies Have No Real Value"

Why It’s False:

Many people argue that Cryptocurrencies have no real value because they’re not backed by any physical assets. This is a misconception. The value of cryptocurrencies is determined by their utility, security, technological innovation, and market demand rather than any physical backing.

The Crypto industry can solve real-world problems in any industry using blockchain technology. In my blog “Crypto and Blockchain: The Rising Sun of Developing Nations,” I have discussed a few.

While it's true that Cryptocurrencies do not have any intrinsic value like precious metals or real estate, they possess high-quality perceived value.

Perceived value can also be considered real value because it reflects the price that people are willing to pay based on their trust, belief, and demand for it. If this is not the case, then anyone would have to explain why we have luxury fashion items, luxury vehicles, fine arts, high-end wines and whiskeys etc. 

Final Thoughts

In a changing world, it is very important to separate facts from fiction. Myths like “Cryptocurrencies are not for the average person” or “Cryptocurrencies are rich quick pyramid schemes” can mislead many people and deter them from getting involved in this brilliant technology where financial opportunities are abundant.

I can assure anyone that if you know how to use a smartphone, do basic computing tasks like sending an email, online shopping, and banking, and browse the internet, then getting into Crypto is not a big deal from a technical perspective.

Of course, there are many things that you have to learn in order to navigate this space carefully, but with one step at a time, anything is possible. Let me end my final thoughts with a quote:

“I have seen many birds land on branches, but I have never seen birds fall and die when branches break, so, trust your wings!”

Disclaimer: The contents of this article are for informational purposes only and are not financial advice. The views here are just the author’s opinions. The crypto market is volatile, so be sure to do your own research before investing.