Common Cryptocurrency Misunderstandings

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The speedy growth of cryptocurrency industry increased public attention around blockchain technology and crypto assets, making lots of people believe that it is the technology of the future. On the other hand, some still cast doubt on the blockchain technology efficiency. However, to measure the productiveness of crypto-assets, it is essential to check it out from various sides.

Although, not everyone completely understands the idea of cryptocurrencies, many get involved in crypto industry by trading and investing in it. To ease the management of crypto investments, it is highly recommended by professional traders and investors to use crypto portfolio tracker tools like Coinstats.

Getting to the main point, if we have a look at the crypto market, we can underline several misunderstandings towards Bitcoin and altcoins. So, let’s discuss them.

First misapprehension is the anonymity of Bitcoin creator.

Indeed, it does not have any impact on the technology’s quality and credibility. Bitcoin Core – the source software enabling the Bitcoin use, is open. This means that the code is visible and available to the public audience and it can be freely downloaded by anyone.

Second misunderstanding is that BTC is not backed by any real value and its demand and value are high only if people consider it valuable. In fact, Bitcoin’s value consists of its qualities: its adoption – willing to use Bitcoin is increasing day by day, Bitcoin can not be counterfeited or destroyed, it is portable and decentralized. What’s more, it is also inflation-protected, as its total supply is fixed – 21 million.

Third misunderstanding is that cryptocurrency is only the bitcoin, which is used by the wrong crowd to engage in illegal activities. Indeed, Bitcoin is a cryptocurrency, however, cryptocurrency is not only Bitcoin, as there exist more than 4,000 crypto-assets worldwide that are called Altcoins. As for Bitcoin, it is the first decentralized crypto-asset and can be used by anyone for various purposes – regardless of the fact how good or bad they are.

Next misunderstanding is the extremely high volatility of crypto-assets. As a result of frequent fluctuations in crypto-assets’ prices, sometimes the entire crypto industry is considered as a scam. Even if crypto-assets are the most volatile investment tools, however, it’s not accurate to correlate the crypto volatility to its credibility for one obvious reason: the price volatility does not have anything to do with cryptocurrency technology’s qualities. At the same time, it’s worth to take to an account that crypto market is quite young and this also affects the high volatility of crypto-asset prices.

The last misunderstanding we are going to talk about is that BTC is slow. In fact, at the moment blockchain technology is slow with respect to its centralized competitors. Speed is evaluated with the Transactions Per Second (TPS) and BTC is able to process only 7 TPS. At the same time. VISA is able to process tens of thousands of TPS. Nonetheless, lots of innovative approaches are developed to improve the blockchain technology.

As a conclusion, it is a long and tremendous road to widespread adoption and with all the values this revolutionary technology has, negative attitudes on blockchain will always stay from the side of those who are unaware of the crypto-assets’ potential. 

However, if you trade or invest in crypto-assets, you will definitely need crypto portfolio tracker and to discover more about these tools, check this ultimate cryptocurrency portfolio tracker guide.

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