Myth 1: Cryptocurrency is not taxed
Here is the first crypto myth that needs to be debunked. Certainly, neither banks nor a central authority are dealing with this. However, that does not mean that digital money will not be taxed. General property tax laws that regulate the taxation of property transactions also apply to cryptocurrency transactions.
At the moment, there is no clear and straightforward procedure for calculating taxes on cryptocurrencies. However, remember that only profits from cryptocurrency transactions are subject to taxation—any activity with it where income exceeds expenses. At the same time, profits from mining or staking are recorded only at the moment of selling the asset and receiving real money for it.
Myth 2: Cryptocurrency has no real monetary value
Is this the biggest myth about cryptocurrency? We think so, definitely. Since there is no permanent physical asset backing cryptocurrencies, this is arguably the biggest myth about them.
This myth about cryptocurrency is absolutely not true. Thus, cryptocurrency is a full-fledged means of exchange and storage of value. Furthermore, cryptocurrency also has value due to its blockchain technology, a decentralized data storage system that ensures transparency and security of crypto transactions.
Myth 3: Cryptocurrencies are only used for illegal activities
This myth about cryptocurrency is also one of the most popular in the crypto space. You can use cryptocurrency for a whole range of purposes, such as investing, trading on exchanges, paying for goods and services, and sending money. Its legitimacy is also confirmed by the growing number of companies that have started accepting payments in cryptocurrency.
Myth 4: Cryptocurrencies lack regulation
Since cryptocurrency is a relatively new asset class, laws regulating its use and transfer between people are currently being developed. However, many countries have already taken steps to control the crypto market worldwide.
This myth about cryptocurrency has no reliable foundation, even despite the fact that cryptocurrency is partially or completely banned in many countries around the world. Currently, more and more countries are realizing the importance of cryptocurrency in the modern developing world and are therefore creating concepts and improving regulatory measures to make it easier to implement cryptocurrency in the future.
Myth 5: Cryptocurrencies are easy to hack
This myth about cryptocurrency is also widespread among novice traders and people unfamiliar with the topic, and it is also not true. It is extremely difficult to hack the security protocols and complex mathematical algorithms used by cryptocurrencies and the blockchain network as a whole. Most crypto wallets provide excellent security by using special features such as private keys and two-factor authentication.
Myth 6: There is only one huge blockchain
Definitely not! There are many blockchains, and each of them is compatible with various types of cryptocurrencies. For example, three different blockchain networks—Ethereum, Bitcoin, and Litecoin—have different features, throughput, and supported coins.
Myth 7: Cryptocurrencies are a get-rich-quick scheme
This crypto myth is also not true. Like any other type of investment or trading, cryptocurrency requires a serious approach and specialized knowledge. It certainly does not guarantee quick and easy money-making. In fact, investing in cryptocurrency can be very risky and requires experience or at least prior preparation.
Myth 8: Cryptocurrencies are not accepted as a payment method
With the development of many organizations and online stores, more and more of them are accepting cryptocurrency as a payment method. Some countries are also starting to consider the possibility of using cryptocurrencies as official currency. For example, in Switzerland, it is already possible to pay taxes with cryptocurrency. In Japan, Bitcoin has been recognized as official currency. Thus, this statement is also one of the popular myths about cryptocurrency.
Even in the gaming industry, the payment method using cryptocurrency is also beginning to be widely adopted. If you are interested in this topic, check out our article on buying video games with BTC by clicking here to enhance your gaming experience.
Myth 9: Cryptocurrencies and their transactions cannot be tracked
Every crypto transaction is tracked in a public blockchain, a distributed database open to all users. This allows anyone to observe all transactions linked to a specific wallet or address.
However, it is not always possible to definitively identify the wallet owner, as network participants use pseudonyms and anonymous addresses. Thus, all crypto transactions are tracked on the blockchain, but it is not always possible to identify their participants.
Myth 10: All cryptocurrencies are the same
Many people understand that the field of cryptocurrencies is quite multifaceted, but the crypto myth that all digital currencies are the same remains widespread. Different countries have their own national currency. Similarly, in the world of cryptocurrencies, there are a huge number of currencies and coins that have various characteristics and features that make them unique. Transactions with some cryptocurrencies may take longer, while with others, much less. Volatility, capitalization, and demand also play a significant role.
