Bitcoin (Still) Has An Image Problem
Reaching out to 100+ finance bloggers taught me a lot about the misconceptions about bitcoin that still persist today.
Last year, I ran Growth Marketing at a New Zealand-based bitcoin startup. As part of my work to grow the company’s user base, I conducted “blogger outreach” with the aim to onboard as many bloggers as possible to our affiliate program.
The responses I received to my inquiries gave me an interesting insight into what non-crypto folks actually think about bitcoin.
Let’s talk about the biggest misconceptions about Bitcoin that are still spread and believed today.
To protect the privacy of the people I interacted with, I will not share any of their responses. Instead, I will share with you the main takeaways of contacting 100+ UK finance bloggers, many of whom had some very wrong impressions about bitcoin.
So here we go!
Some people (still) think bitcoin is a Ponzi scheme.
Some people (still) think that only criminals use bitcoin.
Some people (still) think bitcoin can easily be hacked.
Some people (still) think bitcoin is “a bubble.”
Some people (still) think that bitcoin has no real value.
I work in the Bitcoin industry so I was a bit surprised to see that many of Bitcoin’s earliest misconceptions were still making the rounds over a decade after the digital currency’s launch.
Top 5 Bitcoin Misconceptions
So let’s address each of the five biggest bitcoin misconceptions that I came across.
Bitcoin is (NOT) a Ponzi scheme
I am not quite sure why there are still more than enough people who think that bitcoin functions like a Ponzi scheme and that someone can pull a fast one at any minute. That is incorrect.
Bitcoin is a digital currency that operates on a cryptographically secured peer-to-peer network.
It’s not run by a central authority that can dictate what the price will do, how much BTC is in circulation, or who owns which coins.
Bitcoin is NOT only used by criminals
I can’t believe this is still a thing. Yes, many many years ago bitcoin gained adoption in darknet marketplaces and yes, it’s still used in commerce on the dark web today. But research shows that less than 1% of bitcoin is used for criminal activity.
How much of US dollar circulation do you think is used by criminals? Perhaps more than 1%?
Anyway, back to bitcoin.
Personally, I have spent bitcoin on
topping-up mobile minutes (in several countries);
PlayStation Store gift cards;
You get the idea!
Billions in bitcoin exchange hands every day. People are buying anything from luxury items to simple household items at online vendors that accept cryptocurrency.
Bitcoin (CANNOT) be hacked easily
The myth remains that Bitcoin could be hacked any moment and thus, lose all its value. That is incorrect.
Your bitcoin wallet can be hacked if you give someone access to your login details or private keys.
But the Bitcoin blockchain (i.e., the Bitcoin network) is the most decentralized and secure cryptocurrency network in the world, making it incredibly difficult to attack.
To date, the Bitcoin network has never suffered from a large-scale hack that rendered the network unusable.
Bitcoin is NOT a bubble
There are financial “experts” who are trying to stay relevant by being anti-bitcoin, calling it a bubble, and declaring the cryptocurrency “dead” every time a major price drop happens.
Well, all of them have been wrong for over a decade. Bitcoin is not a bubble.
Bitcoin has established itself as a new type of asset - akin to gold - with a mathematically verified limited supply, utility, portability, and divisibility. Hence, it is often referred to as digital gold.
In the past six months, even S&P 500 companies - including Jack Dorsey’s Square and Elon Musk’s Tesla - have added bitcoin to their balance sheets, recognizing bitcoin’s value.
Bitcoin HAS intrinsic value
The same financial pundits that claim bitcoin is a bubble typically come with the argument that it has no intrinsic value. Funnily enough, so did a bunch of the bloggers I reached out to.
As I just explained, bitcoin has many of the same features as gold but - in addition - can be easily transferred from anywhere in the world to anywhere in the world for only a few dollars in transaction fees. This - ladies and gentlemen - is unprecedented.
Moreover, unlike gold, bitcoin is censorship-resistant. That means the bitcoin you hold in a personal, non-custodial wallet, can only be accessed by you and no bank or government can easily take your funds (which is the case with the money in your bank.)
Combined with its limited supply, bitcoin has immense intrinsic value - especially in a time when the traditional financial system is looking shakey.
To learn more about bitcoin and why you should probably hold some, read the highly popular issue of A Little Bit of Anarchy titled “Why You Should Own (At Least Some) Bitcoin.”
Love, peace, and anarchy,