Stop criticizing Bitcoin. Your prejudice against it may come from these 7 misunderstandings

I often receive questions from cryptocurrency enthusiasts in the background. They are very interested in Bitcoin, but are hesitant to buy it due to some common misunderstandings about Bitcoin.

Today I want to talk about some recurring, common misunderstandings about Bitcoin so that everyone can have a more intuitive understanding of Bitcoin.

1

Is Bitcoin a coin?

Many novice Bitcoin users will see "Bitcoin" photos similar to the following on the Internet when they first come into contact with Bitcoin.

Be careful! If someone tries to sell you this kind of "bitcoin", don't believe it!

Bitcoin is not a physical coin , nor is it a file sent from one computer to another - the "coin" in Bitcoin is just a metaphor. "Coins" like the ones in the picture have no real value in life, except as souvenirs.

2

Do I have to buy a whole Bitcoin every time?

As mentioned above, Bitcoin is not a "coin" and you don't need to buy a "full" Bitcoin.

Just like the RMB exchange for other legal currencies, the amount of currency exchanged each time changes with the exchange rate. Similarly, the amount of Bitcoin purchased with legal currency is determined by the Bitcoin price at the time.

3

Can Bitcoin be shut down?

Bitcoin is based on a distributed network of computers with no central server. Companies can be shut down, but Bitcoin can only be shut down by disrupting the global Internet, which is impossible.

Even if the world is suddenly disconnected from the Internet for a few hours or days, when the network is restored, Bitcoin only needs a few network nodes to operate worldwide.

Countries and institutions can only ban digital currency exchanges or restrict Bitcoin trading through strict regulations.

4

Are only criminals buying Bitcoin?

It is said that due to the "strong anonymity" of Bitcoin, the identities of both parties in the transaction cannot be traced at all. As a result, in recent years, there have been endless news reports of hackers extorting Bitcoin and underground trading markets using Bitcoin for transactions.

The statement that "criminals like to use Bitcoin" has gradually gained a lot of response.

But according to a report by the UK Treasury in October 2017, less than 1% of Bitcoin transactions are criminal.

Bitcoin is really more unfair than Dou E. People have used cash to commit crimes since ancient times, but we have never seen people stop using cash?

The fact is, experienced criminals prefer cash, but law enforcement loves Bitcoin.

Yes, Bitcoin transfers from one address to another do achieve a large degree of anonymity, but on the Bitcoin blockchain, every transaction is open, transparent and traceable.

This means that when Bitcoin is converted into legal tender, the legal tender account can also be traced.

Although most ordinary people do not have the technology to dig out who is behind a Bitcoin address, it does not mean that technical experts and law enforcement agencies will not do it.

5

Bitcoin is often attacked by hackers, so it is not safe?

First of all, the editor of Coin Science seeks justice for Bitcoin - hackers have stolen a large number of Bitcoins. However, Bitcoin has never been successfully hacked.

The victims of hacker attacks are mainly some digital currency exchanges and some digital currencies with vulnerabilities , and most Bitcoin thefts are the result of insufficient wallet security.

And these easily hackable exchanges use client-server technology which has unique points of failure, which is the exact reason why Bitcoin was created in the first place - we are seeing more and more decentralized exchanges emerging and replacing centralized exchanges.

Want to ensure that your Bitcoin is not stolen? Users only need to properly protect their digital wallets and keep their keys safe.

6

Is Bitcoin “mining” a huge waste of energy?

Anyone who is paying attention to Bitcoin for the first time is probably confused by "mining", which seems to be a meaningless waste of energy.

In the same way that gold diggers expend physical energy digging holes, cryptocurrency "miners" use mining machines to solve "meaningless" mathematical problems called "Proof of Work (PoW)" on the blockchain.

Bitcoin’s incentives force “miners” to seek the cheapest (and increasingly renewable) energy to reduce costs and increase competitiveness, which in turn means that Bitcoin will use less energy.

A recent study noted that Bitcoin mining consumes less than one-eighth of the energy consumed by U.S. data centers, and "mining" consumes less energy than current technology-class data centers.

7

Is Bitcoin a Ponzi Scheme?

This is the most common Bitcoin misunderstanding I have heard.

Ponzi schemes typically involve a centralized entity trying to convince potential investors that they will reap huge profits, and in these schemes, the only way those at the top can make money is at the expense of everyone else.

However, Bitcoin is a decentralized peer-to-peer currency. It has decentralized properties and there is no centralized entity. Bitcoin does not require a steady stream of funds to maintain its survival.

Conclusion

The nascent cryptocurrency market is hard to ignore, thanks to the soaring prices of digital currencies such as Bitcoin and the potential for blockchain to spark interest from governments and businesses.

Bitcoin naysayers repeat tired old misconceptions in an attempt to scare away those interested in the digital currency.

The above misunderstandings are part of the reasons that prevent most novices from investing in Bitcoin.

Of course, you must "do your homework" before investing. We must resolve these Bitcoin misunderstandings before we can enter the market with confidence!