To quote Fortune “Bitcoin can be quite polarising. Bitcoin diehards claim it will soon replace gold, money and credit cards, and turn the banking system upside down.” While they think that is pretty unlikely, we don’t at all.
But where they are right is that they think critics in the media often portray Bitcoin as nothing more than a speculative tool, an environmental disaster, a bubble, or worse. We have to agree with them on that. That’s why Bitcoin Q&A has put together 13 bitcoin myths for you.
Bitcoin has no intrinsic value
Parker Lewis sums this answer up best in his article. “Like all money, Bitcoin is backed by the credibility of its monetary properties”. Bitcoin is valuable because it is verifiably scarce, anybody can check exactly how many bitcoins are in circulation at any time. It is valuable because it is secured by millions of $ worth of assets worldwide through its distributed mining and consensus mechanisms. It is valuable because it is the first and only form of money that anyone with an internet connection can take part in. It does not discriminate and it does not censor.
Bitcoin is anonymous
This is not true, Bitcoin is ‘pseudonymous’. Meaning that at a network level a wallet or address is not directly linked to a real life identity. This means that chain surveillance firms can follow and link together ‘bitcoin identities’ without knowing who the individuals behind them are. But, if you purchase bitcoin through an entity that requires personal information then those companies can tie together a real person and a bitcoin address. Always be mindful who you give this information to.
The Bitcoin code could easily be changed
This is just plain false. Bitcoin has become renowned (and sometimes criticised) for the length of time it takes to implement changes to its codebase. This is because any major changes to Bitcoin’s code has to go through a rigorous peer review process before implementation. If this code change would result in a lack of backward compatibility (meaning older software may not be compatible) then the process becomes even slower and more rigourous.
Bitcoin can be copied
At a network level you can, and lots of people have. There are literally hundreds of copies of Bitcoin, each usually with a minor tweak to its code to ‘improve’ it. Almost always these ‘improvements’ come with huge tradeoffs that prevent them from gaining any traction on Bitcoin’s massive network effects. These copies usually have an unfair launch which are generally carried out to enrich their founders. Their design usually makes it very difficult for the average user to run a node. This means the project becomes very centralised and a few parties have a large influence over any changes. >> Listen to the Fud Buster
There isn’t enough Bitcoin for everyone on earth
There will only ever be 21 million bitcoin. Each bitcoin contains 100 million satoshis. Which means there will be a total available supply of 2.1 quadrillion satoshis (thats 2,100,000,000,000,000) available to circulate around the Bitcoin network. At a world population of 8 billion (rounded up) that equates to 262,500 sats for every person on the planet. Plenty to go around, don’t you think?
Bitcoin is money for criminals
Bitcoin is money and any money can be used by criminals. In 2017 the entire drug trafficking market alone was estimated to be worth $500,000,000,000 (500 billion). At current prices that could buy the entire Bitcoin network 11 times over! It’s probably fair to say that the overwhelming majority of illicit activities are funded by normal ‘fiat’ currencies. It could also be argued that the public nature of Bitcoin’s blockchain might actually make it less desirable for criminals. >> Listen to the Fud Buster
Fees will make Bitcoin unusable in the future
The Bitcoin network has a very efficient fee market. There have been some short lived spikes where transaction volumes grew exponentially resulting in higher fees. The average transaction fee in $ for the past 12 months is just 77 cents. We are personally of the opinion that fees will not rise significantly for at least the next couple of years, but when they inevitably do, we have Lightning which is a promising scaling solution that has matured a lot since its inception. You can read more on Lightning here.
Miners control Bitcoin
Whilst it’s true that the miners play a critical role in Bitcoin’s operation, to say that they control the network is not. Miners are financially incentivised to act in good faith and the network only requires just over 50% of miners to be honest for the network to continue to function. In the highly unlikely event that a majority of nefarious miners got control of the network it would cost them over $300k per hour to sustain. If they were to succeed, not only would it be extremely costly but the price of bitcoin would likely plummet, making their efforts even less fruitful.
Miners will stop mining when the block subsidy drops
Obviously nobody can be certain of this one as it’s a future occurrence. But the common expectation is that as the block subsidy drops, fees will rise and miners will continue to be compensated for their work processing transactions and securing the network. By which point, the likelihood of there being a commonly accepted scaling solution such as Lightning will be far greater. Even if some miners stopped mining, thanks to the network’s ‘difficulty adjustment’ it would still continue to function just fine and blocks would still be produced on average every 10 minutes.
Mining is bad for the environment
It is true that Bitcoin’s proof of work mining process consumes vast amounts of energy, but much of this now comes from renewable sources. Bitcoin is also pushing the development of energy capture by making use of sources that would otherwise be wasted such as flared natural gas. Bitcoin only consumes energy to the market’s appetite. If more people choose to value and use bitcoin, then more energy will be dedicated to securing it. The opposite is also true.
Bitcoin is too volatile
Its certainly no secret that Bitcoin does have some monumental price movements. It is a relatively new financial asset that the market is still trying to understand. This is why it is always good advice not to try and trade the market for profit. By adopting the strategy of making smaller more frequent purchases you effectively ignore Bitcoin’s price volatility and obtain the ‘market average’ price. Not financial advice.
Bitcoin is too slow
f Starbucks were to accept bitcoin tomorrow, then yes, waiting 10 minutes for a confirmation to pay for your latte may not be the ideal situation. For near instant payments like that, we have Lightning. Although the user experience isn’t quite as polished as CashApp or Venmo it’s certainly getting there. But let’s say you want to transfer $50,000 to the other side of the world, when compared with the current available options, 10 minutes doesn’t seem slow does it?
Bitcoin is too difficult to use
This is a highly subjective view and depends on the individual. But yes, right now, we agree that it’s easier to tap your bank card on a terminal than to dig out your phone, scan a QR code and wait for a confirmation. We think an extra couple of steps to make a Bitcoin transaction is a small price to pay for the benefits the network offers. There’s 1000’s of developers worldwide working round the clock to make the user experience easier. Just like all technology, it takes time to develop and refine.
This article is written by Bitcoin Q&A and was first published on bitcoiner.guide. The guide brings you the necessary know how on everything related to bitcoin, security and privacy