Debunking myths around Bitcoins

Bitcoin is used for criminal activities; Bitcoin has physical existence; Bitcoin is not safe to use; they have no value because anybody can create Bitcoin; Bitcoins are given out for free etcetera are some of our versions of the story to talk about Bitcoin. These stories have emerged from baloney we hear from people or what we read on the internet. While the crypto-currency has its set of downsides, a lot of stories around it are mere exaggeration and there’s a plenty of misinformation being spread. However, the good news is people in India are slowly opening up to the idea of this virtual currency and are taking their time to dig out genuine information on the currency.

With all the ‘nays and yays’ around Bitcoin, we decided to debunk some myths and state some fact around the crypto-currency.

Bitcoins are illegal because they haven’t been declared legal by the authorities: One of the biggest misconceptions, hovering around bitcoin is the currency being illegal, only because the government hasn’t declared it as a legal tender. Anywhere in the world, legal tender are coins and bills minted and issued by the government. However, that does not suggest bitcoins being illegal. At present bitcoin enjoys the status of being a virtual currency or crypto-currency all over the globe. However, countries such as Japan, Germany to name a few have declared bitcoin as legal tender already, while in many other countries, including India the debate is still on.

Bitcoins do not have any radical value: The value of bitcoin has been disputed ever since the beginning, apart from their use as a medium of exchange. Nonetheless, its value is a debatable issue. Putting things into perspective, the demand and supply of anything defines its value. With the ever growing number of usage and some countries legalizing bitcoin, the value of the crypto-currency is only increasing by the day and may soon become a mainstay.

Bitcoin aids in money laundering: Naysayers have used various examples from the dark web to demonstrate a myriad of illicit activities using bitcoin. The Silk Road case has often been mentioned to validate the existence of bitcoin grey market. However, people often miss the point that drug dealers accepting cash in some corner of a street also demonstrate the same, placing both bitcoin and any legal tender currency on the pedestal. The very fact that various bitcoin communities across the world are ready to cooperate with the government and are waiting for regulations around it is proof enough that money laundering is not its primary use.

Bitcoins come without any cost: This is another misconception spurred by lack awareness on bitcoins. Absence of good understanding about the procedure of mining ensues into people believing that bitcoins are given away for free. However, the fact is, bitcoins are mined in a computing resource-intensive process that authenticates conversions after solving a series of complex math. Miners who process and verify bitcoins transactions are rewarded with bitcoins, as well as with fees others pay. The whole process eventually boils down to the age old saying ‘It costs money to make money’ and mining bitcoins till date has incurred hundreds of thousands, busting the myth that bitcoins come free of cost.