Cryptocurrencies are seen in a variety of ways, from fervently excited to cynical. Crypto is considered a speculative craze or a technological breakthrough that will irreversibly disrupt the banking system. But investors must distinguish fact from fiction to prevent costly blunders.
Myths about Cryptocurrencies
Below are some of the frequent crypto misunderstandings.
Crypto Myth 1: All Cryptocurrencies Revolves in One Axis
Bitcoin and cryptocurrency are often confused as the same, however, this is not the case. Bitcoin, on the other hand, has been there for a long time, although the crypto world as a whole is still in its infancy. To put it in context, other cryptocurrencies are startups, and investors should regard them as such.
Crypto Myth 2: The Get-rich-quick Scheme
Trading in cryptocurrencies, like all other forms of investing, is a zero-sum transaction. You make wealth at the cost of others. There’s also a popular belief that mining cryptocurrency is a quick method to get rich.
The expense of setting up might be rather considerable. Because crypto mining is a costly enterprise, not everyone with a desktop can mine cryptos.
Crypto Myth 3: The value of all stablecoins is supported by US dollars
Some stablecoins are valued on a one-to-one basis with traditional (government-issued) banknotes such as the US dollar, euro, and yen. Others are supported by actual assets such as gold or other assets such as real estate.