These Ridicoulus Bitcoin Myths Are Still Alive At The End of 2018
Yes, someone still believes in it
As in case with every trending global phenomenon, a vibe of guesses, misconceptions, and myths has been surrounding Bitcoin since the very beginning. One might think that after all this time no one believes in these myths anymore, and yet today we still meet people who share these misconceptions.
To the best of my modest ability, I’ll try to make my blog’s readers disavow at least a part of them.
Myth №1. Bitcoin is not backed by anything, so it costs nothing
The first one is, of course, a common claim that Bitcoin is absolutely not backed with any kind of a “real” asset. As one would often exclaim: “I don’t believe in Bitcoin because nothing real stays behind it.”
Getting through changes is always hard. We’ve got used to the world where all coins are always “backed” with some kind of an asset, such as gold etc. Mind that in 1970-s the world also had to accept the new US dollar which was no longer tied to gold. So, basically, the case with Bitcoin brings nothing new here.
The Bitcoin value purely lies in the Bitcoin phenomenon. This coin is not pegged to any other asset — even a “computing power” which solely serves as the means to manufacture this coin. However, as far as I can see, Bitcoin rate directly impacts on other cryptocurrencies’ mood.
What is important, is the full correspondence of this situation to the theoretical findings. The value of a good is only based on the importance attributed to this good by an acting individual (See the “Subjective Theory of Value”).
Finally, don’t forget that most enterprises are built around virtual and digital things now.
When trying to delve into what actually constitutes the Bitcoin value, we’ll inevitably fall in theoretical complications. However, the two things are clear and fundamental about it:
- People do accept this coin as the means of exchange worldwide. So, global adoption, as well as the market distribution of supply and demand ensure the Bitcoin’s value.
- At the second point, the value is based on the way Bitcoin is used. It is closely related to the value of the network as such. Based on Metcalfe’s law, a single phone device is useless without being connected to the network. The same can be said about Bitcoin: the whole network is generating transactions along with the coin’s value.
Myth №2. Third parties can set their control over Bitcoin
The second myth I’d like to cover says that developers can set their control over Bitcoin.
While decentralization and zero hierarchy is by definition inherent to the community, it’s fair to add that no change can be introduced to the network without consensus reached among the developers. If at least a part of developers decides not to support a new release of the Bitcoin client, new transactions would simply get rejected.
It’s noteworthy that some disagreements between the community’s participants are even considered to hinder the network from further enhancement. This is just to contest the point about the possibility of conspiracy.
Myth №3. Bitcoin can be compromised or hacked
And finally, some people believe that Bitcoin can be compromised, or hacked.
In fact, there is no such a precedent in the whole record of this cryptocurrency. Unfortunately, some exchanges and websites of financial services were compromised. Yet, it never used to be the case with the Bitcoin protocol itself which so far has remained irresistible.
The fundamental and common argument is that Bitcoin is protected with cryptography. With all that, absolutely every one of us can access the coin’s source code. Do you remember when the whole team of “hackers” was paid $500.000 by Wences Casares to “break” the protocol with the attempt totally failed after all? No security “holes” or vulnerabilities were ever revealed.
So, I tried to elucidate on some popular misconceptions about Bitcoin. Are there any other popular myths that I missed? I will be glad to receive your feedback in the comments below!
