Photo by Dmitry Demidko on Unsplash
Recently, news of Bitcoin prices being on the rise has been making headlines. But what exactly is Bitcoin? A Bitcoin is a form of Cryptocurrency; just one type among many others such as Ethereum and Ripple. It’s an entirely digital currency that relies on cryptographic protocols to ensure secure transactions in place. Furthermore, it runs on blockchain technology for its functioning purposes. If you want to know more about cryptocurrency, then you may visit this site https://1g-profitsystem.com.
Bitcoin is a decentralized currency and is not regulated by any official authority. Rather, when cryptocurrency transactions occur, they are verified by an online network of computers. As part of the verification process, transaction details get grouped into “blocks” that can be seen on the internet and then sent to compute nodes in this global network for confirmation. Once validated, the blocks form links that create a chain – stored across all nodes of this vast network – containing data about each transaction made with Bitcoin. Cryptocurrency has confused a lot of people due to the many myths surrounding it.
In this article, we’ll attempt to provide an objective overview of cryptocurrency and blockchain technology – debunking some of the most common misconceptions about them. We hope that by doing so, readers can gain a better understanding of how cryptocurrencies work and why they are becoming increasingly popular.
Which are the myths surrounding Cryptocurrency?
There’s no real money value in Cryptocurrency
This is among the greatest myths concerning cryptocurrencies due to the fact they don’t have some tangible backing. The individuals that trade with cryptocurrencies value the system’s inherent value, and that continues to be an important element in its success after 2008. Cryptocurrencies will stay so long as there are individuals that appreciate them and have faith in their value.
Cryptocurrencies are used for illegal activities
One event from the Silk Road Raid in 2013 determined that huge amounts of Bitcoin had been used for human as well as drug trafficking – but cryptocurrency isn’t restricted. Sure, there’re felony cases wherein cryptocurrency had been utilized to acquire cash, however, India has KYC (Know Your Customer) conditions for cryptocurrency trading to make certain that there isn’t unlawful use of electronic currency.
There is only one Blockchain
It’s not true as there are a lot of Blockchains. Blockchain is an application which could be utilized to resolve any issues- there might be private or public variations of blockchain, and the information might be open or maybe closed. One kind of blockchain could be utilised to support Bitcoin, while other types could be utilized to back some other cryptocurrency assets like Ethereum, Ripple, etc.
Cryptocurrency transactions are not traced and anonymous
An electronic ledger known as the blockchain keeps tabs on everything. Even though there exists some anonymity, it isn’t inconceivable to identify users as well as their personal information in severe instances. User anonymity exists on this platform the same as on every other platform, however, it isn’t total.
No Taxes are applicable on Cryptocurrency
Of course, there’s no central authority required and there were no banks involved. Nonetheless, this doesn’t prevent the reality that electronic currency is utilized to stay away from paying taxes. It’s similar to every other transaction and you’re taxed if you make a purchase or even when somebody makes a transaction in crypto. You’ll be taxed 20% on the income when you’re investing for a long-term financial investment which is going to last a minimum of 2 years.
Cryptocurrencies can be easily hacked
The same as every other trading platform, you can utilize a platform to exchange cryptos. Only by enhancing the protection of wallets which enable cryptocurrency trading are you able to guard your wallet and guarantee secure transactions.
