Lack of education is one of the major hurdles preventing cryptocurrencies from reaching mainstream adoption. Sadly, lack of knowledge is a breeding ground for misinformation, and this has birthed many misconceptions about digital assets that have scared mainstream users from embracing the decentralized economy.
Things are even worse with the crypto market in a bear cycle, as it seems as though the myths are true. But what better time to debunk these scary crypto tales than when everyone is free from the mind-clouding euphoria that comes with surging prices?
With that said, here are some of the most common misconceptions in the crypto industry.
Myth #1: All Cryptocurrencies Are The Same
There are almost 21,000 cryptocurrencies in existence today. While some crypto coins and tokens rival each other, others are designed to serve different purposes.
For instance, Satoshi Nakamoto designed Bitcoin as a decentralized peer-to-peer electronic cash system that allows people to exchange value without financial intermediaries like banks. On the other hand, Ethereum was designed as an ecosystem to support the development of decentralized applications.
Myth #2: Crypto Has No Value
This is perhaps the biggest myth about cryptocurrencies. The term “value” is subjective, as people can assign different values to different objects.
A digital asset becomes more valuable if enough people agree that it is valuable. As such, institutional investors and retail traders who engage with cryptocurrencies believe in their inherent value.
The value of a crypto asset is determined by many factors, including price, utility, competition, popularity in media, security, regulation, and availability.
Myth #3: Crypto Is Illegal
Many people fear engaging with crypto because they feel digital assets are illegal. But that is only partially true, as each country treats crypto differently. While crypto activities have been banned in nations such as China and Algeria, other countries like El Salvador, the Central African Republic, the United States, and the United Kingdom have adopted crypto as a legal tender or made rules to accommodate digital assets.
Interestingly, countries like India and Russia that previously prohibited crypto transactions have overturned the ban, allowing their citizens to interact with the asset class.
Myth #4: Crypto is Unregulated
Many people are scared of joining the crypto bandwagon because they think the crypto market is completely unregulated. While it is true that the crypto industry is still in its early stages, regulators are becoming more involved in the market. This is because cryptocurrencies are fast becoming essential to the global financial market. For example, the United States Securities and Exchange Commission (SEC) doubled its workforce earlier this year as part of its efforts to protect investors.
Similarly, crypto entities such as Binance continuously collaborate with regulators worldwide to offer digital asset services in compliance with local regulations. As the world’s largest blockchain ecosystem, Binance recognizes that a more regulated industry will fuel wider adoption, provide more underprivileged communities with greater financial freedom, and can significantly improve countless lives across the globe.
Myth #5: Criminals Mostly Use Cryptocurrencies
Crypto critics assert that criminals mostly use cryptocurrencies for illicit activities because they are untraceable. But that is not entirely true.
While some criminal organizations use crypto for nefarious purposes, bad actors still utilize traditional currencies since blockchains leave digital breadcrumbs, which government agencies and crypto analytics entities can use to track criminals.
Furthermore, crypto platforms now require users to submit their information in compliance with anti-money laundering rules.
On top of its strong compliance practices, Binance also recently launched a global training program for LE and prosecutors on how to detect financial and cybercrime. This is a critical step to ensuring the safety of the blockchain ecosystem while allowing for innovative solutions to progress.
Although Bitcoin is nearly 14 years old, the broader crypto market is still in its early years with lots of growth potential. Unfortunately, the lack of education has scared many people away from the crypto space.
This is why leading cryptocurrency exchange Binance continues to make efforts to make the crypto market a less scary place for everyone. In conjunction with Halloween, the company launched an educational series dubbed “Crypto Creepers” to sniff out some of the fears about digital assets as the industry enters its teen years.