Bitcoin The first cryptocurrency, Bitcoin was introduced in the year 2009. At the present, there are thousands of cryptocurrencies that have the sum of around $2 trillion. The soaring price earlier in the year resulted in hundreds of thousands of cryptocurrency millionaires, at the very least, on paper. The cryptocurrency market could be a huge speculative bubble that could end up harming novice investors. In fact, some cryptocurrency fortunes have already disappeared in the wake of the recent decline in prices. Whatever their final fate the innovative technological advances that underlie them will change the way we think about financial markets and money.
Cryptocurrency is a real currency that is able to be used for transactions.
MYTH No. 1
Bitcoin and Ethereum were created as a means of making payments that do not rely on traditional methods like currency note cards, debit card checkbooks, or credit cards. It’s bitcoin white paper that started this cryptocurrency revolution describes an electronic system of payment that permits “any two parties willing to directly transact with each another without the need of an untrustworthy third party,” cutting governments and banks out of the financial loop. The website Pymnts claims, “Blockchain IS the future of payments,” a reference to the technology behind computation that powers cryptocurrency.
It is now very costly and time-consuming to make transactions with cryptocurrencies. It takes around 10-15 minutes to wait for a bitcoin transaction to be verified and the average cost for a single transaction was just recently around $20. Ethereum is the second-largest cryptocurrency, handles transactions a bit faster, but has the highest costs. Find out how to make immediate profit in this regard
Furthermore, wild swings in the value of many cryptocurrencies make them less reliable as payment methods. In April of this year, the cost of Dogecoin was around 20 cents. The price grew by three times over the following two weeks, before dropping to half the value of its peak 10 days after. It’s like that a $100 bill could get you a cup of coffee in one day, and then an extravagant meal at a fine restaurant only a few weeks later. Even on a quieter and more normal day, the price of a major cryptocurrency like Ethereum could vary by as much as 10 percent, rendering it unwieldy to be viable. In the past, Elon Musk announced that Tesla will not take bitcoin as a method of payment, going against an earlier policy that was implemented prior to the start of the year. The value of one bitcoin almost immediately fell. A Chinese enforcement crackdown on cryptocurrency reduced by one-third the value within a single day.
MYTH No. 2
Cryptocurrencies can be a great investment.
Bitcoin investment funds and other cryptocurrencies are exploding. Even the biggest banks like Goldman Sachs and Morgan Stanley are getting involved. It is likely that you would have earned an amazing profit when you bought one of the most popular cryptos in the past year. A common piece within The Motley Fool debates not whether cryptocurrency is a wise investment but “which one is the best choice to you.” The site Business Mole claims: “Even with adjustments made, Bitcoin and Ethereum are extremely profitable. It’s simple.”
However, beware. One reason why cryptocurrencies are so attractive is to be the fact that, similar to gold the supply of the majority of cryptocurrency is controlled (by the computers that control the cryptocurrencies). For instance, around 18.5 million bitcoins have been developed so far in the last year, and eventually, there will be an amount of up to 21 million bitcoin. This is a limit that is set in the software that controls the supply of currency.