Cryptocurrency and blockchain technologies are the most widely used globally in the current day scenario, and their advantages are becoming better understood. In the upcoming years in the virtual assets, the government needs to hire professionals to investigate the same. But there are significant myths and beliefs about blockchain and cryptocurrencies which should be busted from people’s minds. These misconceptions form easily as these are relatively new technologies to the world. The misconceptions and myths about these technologies only “rooted in fear,” as Anne Warner, who happens to the general counsel of Algorand.
List of some Misconceptions about cryptocurrency
Cryptocurrency myths and misconceptions have become common these days, due to which consumers might face confusion or problems. Here are some crypto myths and blockchain misconceptions cleared:
Cryptocurrencies and blockchain are the same things:
Transactions that need to be confirmed and verified can put on the blockchain without even involving any cryptocurrency. To explain this, let us consider the example of Columbia, which took the help of a blockchain system to build a COVID 19 tracking throughout the country. Blockchains catalyze cryptocurrencies, but the reverse is not true. Blockchain can used in other use cases also.
Blockchains follow a similar way of operation:
Blockchains are basically of three kinds that are different. One decentralized, one is highly expensive, and the others are comparatively greener. Blockchains follow different functioning methods, and this number is increasing exponentially as the attributes of this blockchain keep on increasing. It is challenging to tackle blockchains regularly due to the variation among all the blockchains.
Cryptocurrency can not be tracked:
A common myth among people and most governments is that cryptocurrencies are only used by criminals and cannot tracked to locate them. However, as cryptocurrency is becoming more and more popular, information about this is being studied by all. Since this is blockchain technology, it is transparent, and most crypto activity, including wallets, balance, address, etc., is easily trackable. Due to this, illegal activities using cryptocurrencies have become lower and lower as the years pass.
Interference to impose sanctions:
Another common misconception about cryptocurrency is that it can reduce someone’s ability to impose sanctions effectively. But this fact is highly misleading since cryptocurrency transactions built on blockchain technology. Blockchains are clear, open, and transparent, and hence these are the easiest to regulate. The future of a country’s economy can bright if the respective government gladly embraces crypto transactions since these easily regulated, traceable, and have high transparency.
Natural mining requires energy consumption causes environmental disbalance. Similarly, some people weirdly believe that mining for cryptocurrencies would also result in the same fate and that it is unsustainable for the environment. Although all blockchains are not green, every one of them created the same way. There are environmentally friendly blockchains that can run carbon-free with just the help of a laptop.
Diverse industries cannot use cryptocurrency:
This is a strong myth about cryptocurrencies which says that various industries cannot use them. However, in reality, reputed and big banks are investing more and more money in cryptocurrencies and blockchain technologies. Not only banks but other industries are also taking the leap of faith. According to an intelligent platform for blockchain technology named Block data, almost 55% of the biggest banks in the world have exposure to cryptocurrencies and blockchain.
Controls cannot be imposed with Blockchain:
Another common myth about blockchain technologies is that if you have a company’s financial transactions running on blockchain technology, you lose control over controls such as knowing your customer’s KYC and anti-money laundering. People think that they don’t have permission over these things, and hence most of them restrict themselves from using blockchain. However, all the necessary permissions to access transactional details can be given in blockchain technologies, along with the imposition of necessary controls.
Last words on Misconceptions about cryptocurrency:
In this era of cryptocurrencies, there bound to misconceptions and myths in people’s minds regarding these new technologies. However, they should made aware of all such myths and debunk them to have a clear understanding of these technologies. In this article, we have busted a few such myths about cryptocurrencies necessary to know.