Unless you have been living under a rock, or in a completely different universe to the rest of us, you will know about the existence of cryptocurrencies.
What side of the debate you sit on is entirely your prerogative and decision…lol…you fools. Jokes aside, we have to look beyond the current noise that market commentators love to make to establish whether cryptocurrencies are here to stay or not.
Look beyond price
I recently read a press release which made some very good points.
The fact that cryptocurrency has the word currency in it makes you think about money, right? And what notion does the idea of different currencies give you? Your answer is most probably value.
However, the press release asked the reader to consider this: a currency that is almost entirely dissociated from the conventionalism of value-based benchmarks and is dependent on how much (or little) you use it. That is what cryptocurrency is. It is a currency that gives you greater value each time you increase its usage and, even if you don’t use it, its operative value is determined by how much others use it.
In economics, this concept is called the network effect, where every new user of a service causes a positive effect on the value of that service to all its users.
But we still need to know whether it is a bubble or not. If I own a thousand Bitcoins tonight, will they be worthless when I wake up in the morning? I don’t own a thousand Bitcoins by the way.
Busting common myths
We still need to know more about the beast that we are dealing with. What are the myths surrounding cryptocurrencies, and Bitcoin in particular? I recently read an article on Forbes.com that discussed some of these myths in some detail.
The article pointed out that despite bitcoin’s volatility, the crypto-craze shows no signs of slowing down, neither does blockchain, the distributed ledger technology behind cryptocurrency.
The article added that there’s also a lot of confusion and myths surrounding bitcoin and blockchain, and if you’re going to jump into the market, it’s important to fully understand what you’re getting into.
Eleven members of Forbes Technology Council contributed to the article and debunked some of the most common misconceptions about these technologies.
Blockchain Equals Bitcoin
Since Bitcoin is far more popular than its root technology, blockchain, people get mixed up between the two.
Blockchain enables peer-to-peer transactions to be recorded on a distributed ledger throughout the network. Bitcoin is a cryptocurrency that can be exchanged directly between two people without passing through a third party like a bank. – Jeremy Williams, Vyudu Inc.
Blockchain’s Only Application Is Cryptocurrency
Blockchain and cryptocurrency go together like peanut butter and jelly.
They are outstanding together, but they also work brilliantly on their own.
There isn’t just one use for blockchain. Every business and industry can use the underlying technology of distributed ledgers. – Tammy Cohen, InfoMart Inc
Information On Blockchain Activity Isn’t Publicly Available
One of the common misconceptions in blockchain technology is the fallacy that it is not public.
The majority of blockchain activity is rather traceable, contrary to popular belief.
Additionally, there are no hidden secrets to blockchain and no dark criminology associated with its activities. – Maria Clemens, Management and Network Services, LLC
Crypto Transactions Are Anonymous
Many people are under the false assumption that all Bitcoin and crypto transactions are anonymous.
Bitcoin is a public ledger that tracks how much was sent from one address to the next. Many government organizations have established relationships with major exchanges to complete the mapping of the address to the owner. – Thomas Griffin, OptinMonster
Blockchain Will Change Everything About Business Transactions
Blockchain often gets positioned as a technology that will change how businesses record and manage transactions.
Compared to current methods, it is actually more process intensive, difficult to scale and takes more time to confirm transactions. As for security, it’s mostly useful if there is a need for a secure verification and immutability of transaction records. Otherwise, use cases are limited. – Rajat Mohanty, Paladion Networks
Cryptocurrencies Are Volatile, So Blockchain Must Not Be Reliable
A common misconception seems to come from those who associate the volatility of cryptocurrencies with the credibility of blockchain technology.
Blockchain has many applications beyond cryptocurrencies and will likely be more of a game changer long term. As with most early technologies, the initial use cases, interfaces and content are overrated but the underlying technologies are underrated. – Wade Burgess, Shiftgig
Cryptocurrencies Are Best For Criminals
It’s true that decentralization and anonymity are particularly nice features for criminals, but they’re also great features for law-abiding citizens who are in an economically or politically unstable environment. If you are unable to trust local banks with your money due to corruption, or if your country has the possibility of destabilizing, it’s arguably the best place to keep your money. – David Murray, Doctor.com
Blockchain Is Just A Storage Mechanism
The misconception I see most about blockchain is that people think it is a storage mechanism.
I think its advantage comes when it is used as an exchange, with each transaction involving at least two parties — one to give and one to take. – Stefan Petzov, Swisscom
Cryptocurrency And Blockchain Are For Technology And Finance People Only
Now that more widespread companies such as Square are utilizing these technologies, I believe that the fear of the unknown for the average consumer will encourage the utilization. The average consumer has little understanding of blockchain or even cryptocurrency, therefore shying away from it. People trust Square, so I think that the general public will begin to trust these technologies as well. – Meghann Chilcott, OrderInsite, LLC
Tokens And Coins Are The Same Thing
Blockchain has tokens and Initial Coin Offerings (ICO). Coins have only one utility – to act as a simple store of value. Tokens can store complex levels of value like property, utility, income, and fungibility. Property can be real estate transactions or intellectual property. Tokens can capture commodities or loyalty points. – Jeff Bell, LegalShield
Cryptocurrency Is Fundamentally Different From Other Currencies
There’s been too much hype around the blockchain and “crypto” aspects of cryptocurrency. We need to ask ourselves: What is fundamental about a currency? It is a unit of measure and a way we communicate value. What asset forms the backbone of the value for this new cryptocurrency? Are smart contracts written in ways to adequately capture future appreciation of this asset? – Winnie Cheng, Io-Tahoe LLC
The issue of cryptocurrencies is very personal and emotive. Where you stand is your decision; arriving at that decision needs to be based on solid information and in-depth research. This won’t be the last article on this topic.