For beginners in the cryptocurrency world, we’ve debunked five popular myths about Bitcoin.
Although it might seem like you’re too late to enter the world of Bitcoin and blockchain, there’s always room for newbies in cryptocurrency!
Before we start, it’s important to note that Bitcoin is not the only cryptocurrency. In fact, there are many other altcoins in circulation like Litecoin, XRP and Chainlink. Keep this in mind when discussing crypto payments as each currency type has its own distinct features.
Blockchain technology can be complicated and difficult to understand, which is why we have compiled a list of myths and misunderstandings that newbies might have. We want to ensure you don’t make the same mistakes others have so that you can fully enjoy all this world has to offer.
5 Myths a Crypto Newbie Didn’t Know About Bitcoin
1. Crypto Is Not Just for Buying Drugs!
Did you know that Bitcoin is not only for shady business deals? Nowadays, reputable stores like Home Depot, Microsoft and AT&T accept payments in Bitcoin. You can also use cryptocurrency to donateto non-profits such as Wikipedia or political campaigns.
2. Crypto Is Not an Instant Payment Method
Depending on the cryptocurrency, transaction speed can vary. For example, Ethereum (ETH) payments are processed quicker than Bitcoin (BTC). However, it’s important to note that most digital currency payments aren’t instantaneous. In fact, depending on any delays that may happen, it could take anywhere from a few minutes to several days for your Bitcoin transactions to be processed.
3. Crypto Is Fully Taxable
Though Bitcoin is decentralized and possesses anti-government sentiment, it is still taxable. If you make profit from investing in cryptocurrency exchanges (like Coinbase or Binance), you have to provide your tax information before cashing out and pay income tax on what you’ve earned. Digital assets are considered assets that are subject audits and government oversight by most countries, unfortunately. However, CoinMarketCap has a blog post with tax tips if you cryptotax questions.
4. It’s Not Free to Send Crypto
Forgoing transaction fees would be a loss for the blockchain developers. However, as it stands, most cryptocurrencies have transaction fees with every payment. These compensate the miners who process and validate your transaction. The fees vary depending on the currency used and how urgently you need the payment processed. In some cases, if you’re willing to pay a high enough fee, you can incentivize miners to prioritize your payment.
5. You Can’t Always Get Mega-Rich
You’ve likely heard stories of individuals who become accidental Bitcoin billionaires. While some people have gotten lucky, not every crypto investor becomes a millionaire. There’s continuous volatility in the cryptocurrency market — which means it can rapidly change for better or worse. Prior to investing any money into cryptocurrencies, be sure to do your own research to avoid losing everything on a bad investment!