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Home > Courses > Cryptocurrency Fundamentals > Cryptocurrency Basics > Is Crypto Safe | Myths and Facts

Is Crypto Safe | Myths and Facts

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Is Crypto Safe | Myths and Facts

One of the biggest problems with cryptocurrency has been that there have been many rumors around the market. From various myths distorting the facts and affecting the market, it has been difficult for new investors to rely on the process.

Despite the desperate attempts of various bitcoin mining enthusiasts and financial institutions to prove the rumors wrong, people still believe in the false stories and news meant to let the trade market down.

New investors need to be sure of the different facts in the crypto world to get the most out of their investments.


Cryptocurrencies are illegal


One of the most common myths about cryptocurrencies is that they are illegal. However, the truth can be far from the same. We must recognize that this is a baseless rumor that results in people viewing cryptocurrencies as unfavorable. Although some countries have bans on cryptocurrencies, it does not make them illegal all around the world, as several countries contradict the prohibition by legalizing Bitcoin acceptance. For example, The United States of America has many stores that accept payments in bitcoins. Hence, it is safe to say that cryptocurrencies are far from illegal.


Cryptocurrencies do not have tax implications


This is a super myth. In connection with cryptocurrencies being legal, they also have tax implications. Many countries recognize cryptocurrency earnings as an asset class, and as a result, they have tax implications. For example, all earnings from cryptocurrencies can be termed business income or capital gains in Canada. Hence, it is a recognized asset class and does have tax implications.


Cryptocurrency is only used for illegal purposes


In addition to most people believing that cryptocurrencies are illegal, many also believe that such a form of currency is often used for illicit activities. This is not true. Cryptocurrency works on a transparent ledger system, making it almost impossible for people to hide or alter the records due to the presence of blockchain technology. If you have completed cryptocurrency transactions, they will be automatically on the public ledger. A little digging can also reveal you're true identity only when you want, as it prefers maintaining anonymity. Therefore, it is incorrect to say that cryptocurrencies are an illegal institution or system. They are transparent; however, they offer some anonymity to the transactions but are incomplete. Hence, it is difficult to go around the design and use of cryptocurrencies for illegal activities.


Cryptocurrencies cannot be used for day-to-day transactions


While many countries have still not accepted the wide use of cryptocurrencies, this is slowly changing. We see the first country El Salvador to legalize cryptocurrencies as a legal tender of money. Though several countries have refused to accept this digital asset, enthusiasts and analysts are hopeful that various countries might come up soon in the upcoming years accepting Bitcoins.


Cryptocurrencies are green and good for the environment


Many people consider cryptocurrencies eco-friendly due to their online and virtual existence. But this is an absolute myth and false statement because Bitcoin mining requires lots of energy to mine out one single coin, which uses non-renewable sources. However, not every cryptocurrency is a danger to the environment.


Cryptocurrencies are not secure


Most people fear investing in Bitcoins because of their virtual existence and no actual life existence. But all the users generally store their digital assets in software or hardware wallets which come with private keys making the assets secure from every possible danger. Besides, nobody can ever hack a cryptocurrency network unless a person controls 51% of bitcoins; it can be tough to hack the said system.


Conclusion


These myths add many adverse values to the crypto markets, and this, in turn, makes it difficult for new investors. Therefore, one must be conscious not to enter the traps of such adverse news and rumors. One should look at platforms to facilitate a safe and secure environment for crypto investing and trading. Here you will always get the correct information and update on cryptocurrency, and this platform is safe to use. So trade hassle-free here.

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