**Bitcoin is one of the most populous coin in the world and it remains relatively unfamiliar worldwide because of its growing adoption especially during this period. Many have had mysteries about this bitcoin of a coin especially with the anonymousity that accompanies it. This post will highlight some of those myths that people have associated with Bitcoin
I will also highlight the transparency of Bitcoin transactions and the use of blockchain analytics by law enforcement. Since bitcoin was created in 2009, the Creator has remained a mystery till date. Bitcoin has continued to grow and has captured their attention of a lot of investors worldwide. With its increase which has made it a scarce asset, they have been some misconceptions about the coin of which I'll highlight a few.
The first is that bitcoin is anonymous as its creator and that it is a perfect heaven for criminals especially middle men who tap from people's bitcoin transactions. It is a common belief that this is so but the truth is that bitcoin transactions are pseudonymous and not entirely anonymous.
Most addresses on bitcoin wallet don't have a name attached to them but all transactions carried out and validated are recorded on the blockchain which makes the transaction even more transparents a public ledger.
The transparency it's wields maxi difficult for criminals or fraudsters to carry out any fraudulent activity or scam without leaving a trace. The law enforcement agencies use blockchain analysis to track illicit activities which most times lead to prosecution as was recently done when the president of Nigeria threatened to ban crypto in Nigeria. The owner of binance had to make inform decisions and face out those who were involved in malicious act and then allow them face penalties.the are proofs that bitcoin isn't a anonymous can be tracked and isn't a heaven for criminals.
Another myth is that bitcoin is a Ponzi scheme medium in that it can actually fade up. This assertion is very misleading because a poner scheme involves using funds from investors that are new to pay existing ones and the operator of the scheme pockets a huge amount of collected funds from investors.
This is different with bitcoin as it's a decentralized digital currency with a trustworthy utility. It being decentralized means it isn't control by any central authority which could be channeled a Ponzi scheme while fraudulent projects do exist in every financial sector occasionally, it would be wrong to attribute such.
The third misconception is that bitcoin is bad for the environment because of it's energy intensive mining process. Blockchain on which Bitcoin is based doesn't consume high energy compared to traditional financial system of mining is on the increase. Research has shown that the energy consumption of data centers of the leading too global banks actually exceeds more than triple of bitcoin network.
That same 2021, it was observed that the annual electricity loss in distribution and transmission by the international energy agency and the world banks is 19.4 times above the energy utilized by the bitcoin Blockchain over same time period. Another myth is that bitcoin transparent nature makes it an ineffective tool for use by criminals who attempt to be anonymous.
Another myth or assertion is that bitcoin is a bubble that will burst soon. How? There was this notion that bitcoin is a fleeting speculative bubble that would burst someday even though it has tricked many investors into it. This assertion is false because bitcoin has shown resilience over the years and it's growing adoption into man steam financial system shows that bitcoin is more than what they asserted.
In conclusion, a lot of people had speculations about the coin bitcoin. In fact when it was newly launched, a lot of people saw no future in it and even thought it is a scam. But the truths about bitcoin has been exposed in this content. I'll complete the remaining debunking myths in my next post. Watch out for it.
Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have
