Back in 2009, the first digital currency, Bitcoin, appeared. It is difficult to imagine how many myths have emerged around this cryptocurrency since then. It is not difficult to guess that many people still do not have a proper understanding of Bitcoin. We will try to debunk the most common myths.
Myth 1. Bitcoin Is a Bubble or a Pyramid Scheme
Bitcoin has been called many things: a bubble, a casino, and a pyramid scheme. In financial markets, a "bubble" generally refers to an asset whose price has been inflated without sufficient justification. Such assets often experience rapid price growth, but sharp declines usually follow. Bitcoin has gone through similar cycles over the years. Many people held Bitcoin for years until its price reached unprecedented levels in 2017. However, it fell just as sharply as it had risen. Those who failed to convert their unexpectedly profitable investments into fiat currency or stablecoins, expecting endless growth, saw their profits disappear. Those who bought Bitcoin at its peak in hopes of making "quick money," even selling their homes, apartments, or cars to invest, suffered significant losses. For such people, Bitcoin was—and likely always will be—a bubble.Â
When people talk about pyramid schemes, many imagine Bitcoin at the top. However, there is no centralized organization within the cryptocurrency network that created Bitcoin for its own enrichment or controls all of its processes. The purpose of Bitcoin is entirely different—to create an independent and stable financial system. Unlike pyramid schemes, Bitcoin does not promise guaranteed profits to its users.
Myth 2. Bitcoin Is a Casino
When it comes to those who believe that Bitcoin is a casino, their opinion is understandable. No one can know for certain whether an investment will be profitable or not. However, there are professional analysts who can make forecasts with a high degree of accuracy. There are also experienced traders who know how to anticipate market movements. This is a genuine field of expertise that requires knowledge, experience, and continuous learning. If an unprepared person buys Bitcoin and attempts to trade it without understanding the market, their actions are more like playing roulette, and sooner or later they are likely to incur losses.
Myth 3. Bitcoin Cannot Exist Without the Internet
Let's start with the fact that the idea of the Internet completely disappearing is little more than speculation from conspiracy theory enthusiasts. However, even in such a scenario, Bitcoin would continue to exist, and transactions could still be transmitted through alternative communication networks, such as radio waves (requiring only a 7 MHz, 40 m antenna and the JS8Call application) or via satellite. And this is entirely possible.
Myth 4. Only Criminals, Drug Dealers, and Arms Traffickers Use Bitcoin
The fact that criminals are often among the first to adopt new technologies to make their activities more secure is hardly surprising. However, associating Bitcoin itself with criminal activity is a misconception. In the early years, many people did use Bitcoin to make purchases on illegal marketplaces or to launder illicitly obtained funds. Today, however, such activities account for only about 1% of the entire digital currency industry. There are now dedicated Bitcoin banks, and governments around the world are working to establish legal frameworks governing the acquisition, storage, and transfer of digital assets. In recent years, specialists have also become increasingly capable of linking Bitcoin accounts to users' IP addresses, even when anonymity tools are used. For this reason, it is time to leave this myth behind.
Myth 5. Bitcoin Is Not Backed by Anything, Therefore It Has No Value
It is true that Bitcoin is not backed by any physical asset, but that does not mean it has no value. By the same logic, one could argue that the countries which abandoned the gold standard, including the United States, stripped their currencies of all value, and that the money we use today is nothing more than “thin air.” Moreover, central banks can print virtually any amount of money when necessary, for example, to help economies recover from crises. Does that mean such money is also worthless? In reality, the answer is far more complex. Money has value because it can be exchanged for goods and services—it serves as a universal medium of exchange. Bitcoin works on the same principle. Its value comes from the trust people place in it, the demand for it, its limited supply, and the fact that counterfeit Bitcoin cannot be created. This means that Bitcoin represents a modernized and more advanced form of money.
Myth 6. Bitcoin Is Easy Money and a Quick Way to Get Rich
No one denies that it is possible to invest in Bitcoin and make a profit. However, this does not mean that you can become wealthy easily without putting in any effort. First, earning money always requires knowledge, time, and dedication. Second, many people still miscalculate both their investment potential and their expected returns. For example, some mistakenly believe that if they invest $100 when Bitcoin is priced at $10,000, and the price later rises to $20,000, they will end up with $20,100. Of course, this is incorrect. Investing $100 at a price of $10,000 buys 0.01 BTC. If Bitcoin later reaches $20,000, those 0.01 BTC will be worth $200—not $20,100. The investment does increase in value, but not nearly as dramatically as some people mistakenly expect.
Of course, Bitcoin can experience sharp price increases, sometimes even by 100% or more, and in such situations it is possible to earn substantial profits. However, these rallies are often followed by significant declines, which can reach as much as 150%, and many people tend to overlook this fact. Because many investors do not fully understand these risks or know how to work with the asset properly, they develop unrealistic expectations about the opportunities that digital currencies can offer.
Myth 7. Bitcoins Are Stored in the Wallet File. If I Lose My Wallet, I Lose My Money
When creating a Bitcoin wallet, a mnemonic phrase—also known as a seed phrase (or SEED)—is generated. This is a set of words that allows you to regain access to your cryptocurrency. With your seed phrase, you can access your funds through virtually any non-custodial cryptocurrency wallet. Likewise, if you have your private key, you can access the cryptocurrency associated with a specific wallet address. Therefore, it is not the cryptocurrency wallet itself that gives you access to your funds, but your seed phrase or private key. Even if your wallet is damaged, lost, or becomes unavailable, you can restore access to your assets as long as you still have your seed phrase or private key. A wallet is simply a software application that connects to the Bitcoin blockchain and displays transactions, account balances, and other information, presenting blockchain data in a convenient and user-friendly format.
Myth 8. Once the Last Bitcoin Is Mined, Miners Will Stop Processing Transactions and the Network Will Collapse
As is well known, Bitcoin has a fixed supply limited to 21 million coins, which means it is not subject to unlimited inflation. But what will happen once the last Bitcoin has been mined? Miners keep the Bitcoin blockchain running by validating transactions through complex mathematical computations and creating new blocks. In return, they receive two types of rewards: newly issued bitcoins and transaction fees paid by network users. Therefore, the Bitcoin network will not collapse after the final coin is mined. Transaction fees will continue to exist, allowing miners to keep earning rewards for securing and maintaining the network. At present, transaction fees represent a relatively small portion of miners' income. However, as the number of transactions increases and the value of Bitcoin grows, these fees are expected to become more significant, giving miners a continued financial incentive to support the network. Moreover, according to experts, the last Bitcoin is not expected to be mined for approximately another 120 years, so there is no need to worry about this scenario anytime soon.
Myth 9. You Can't Pay with Bitcoin in Stores Because Confirmations Take Too Long and Transaction Fees Are Too High
Many people are concerned about the time required to complete a Bitcoin transaction. On average, confirmations can take anywhere from 10 minutes to several hours. However, this issue has already been addressed. The Lightning Network enables near-instant Bitcoin transactions. It works by creating bidirectional payment channels between two connected network nodes, allowing users to send and receive cryptocurrency payments almost instantly. This technology makes it possible to process small transactions without congesting the main blockchain, as payments are conducted off-chain. As a result, transactions are completed much faster, while fees are extremely low and, in some cases, effectively zero.
Myth 10. If the Government Wants To, It Can Block All Bitcoin Transactions
In theory, governments have the authority and the necessary mechanisms to restrict digital currency transactions. However, such measures would only make the process more difficult—they would not bring it to a complete stop. In 2019, the Central Bank of Argentina reduced the monthly foreign currency purchase limit from $10,000 to $200. It then prohibited the purchase of cryptocurrencies using bank-issued credit cards and later introduced a 30% tax on purchases made in foreign currencies. Under such conditions, regulated cryptocurrency services turned to alternative payment systems available in the local market. As a result, purchasing cryptocurrency became a two-step process: first, users funded a local electronic wallet with a bank card, and then used the wallet balance to buy cryptocurrency. While this increased the overall cost of the transaction, it did not prevent users from accessing digital assets. Ultimately, implementing such restrictions on a large scale requires enormous resources and significant effort from the government. In practice, it is generally more beneficial for governments to support the development of the digital economy than to undermine it, especially since new technical solutions and workarounds are likely to continue emerging.
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Bitcoin is the future! Read about it, study it, and debunk the myths.