Cryptocurrencies have been gaining popularity lately, but there are still many myths about them. In this article, we will debunk some of the most common cryptocurrency myths. After reading this article, you will have a better understanding of how cryptocurrencies work and their potential benefits.

Myths About Cryptocurrencies

Mentioned below are the Top cryptocurrency Myths Debunked: 

  1. Cryptocurrencies Are Not Taxable

Yes, there is no central authority involved and no banks involved. However, this does not prevent digital currencies from being taxed. It’s just another transaction, taxed every time you sell it or someone pays you in cryptocurrency.

If you make a profit trading cryptocurrencies in India and the profit exceeds 10 rupees, you will have to pay 30% of the profit. 

This applies to short-term gains with no minimum holding period for investments. For long-term profits where the investment must last for at least two years, there is a 20% tax on profits.

  1. Cryptocurrencies Have No Real Monetary Value

This is probably the biggest myth about cryptocurrencies because there is no tangible asset backing them. But those who trade cryptocurrencies believe in the inherent value that has underpinned the system since 2008.

As long as there are people who believe in cryptocurrencies and understand their value, they will stay.

  1. It’s An Illegal Form of Digital Money

Although the currency is banned in countries such as Bolivia, Russia, Algeria, Ecuador, and Trinidad. EU countries, G7 countries, and the US have made cryptocurrencies legal tender. India’s former Finance Minister Arun Jaitley has indicated that blockchain technology will be considered in the 2018-19 budget to facilitate digital and secure transactions. Cryptocurrency trading is not banned in India and is thriving.

  1. Cryptocurrencies Are Used for Criminal and Illegal Purposes

The 2013 Silk Road raids revealed that millions of dollars of bitcoin were used for human trafficking and drug trafficking, but cryptocurrencies are still unregulated. Yes, some criminal cases have been documented using cryptocurrencies to make money. However, India has introduced mandatory Know Your Customer (KYC) procedures for cryptocurrency transactions to reduce the potential for illegal use of digital currencies.

  1. Cryptocurrencies are easy to hack

Using a cryptocurrency trading platform is the same as any other trading platform. Enhancing the security of wallets that facilitate cryptocurrency transactions is the only way to protect them and enable safe transactions.

  1. There is only one giant blockchain

Absolutely not. There are many blockchains. Blockchain is just a technology that addresses various issues such as the public or private version of blockchain, open or closed source.

One type of blockchain may support Bitcoin, while others may support other cryptocurrencies such as Ethereum, Ripple, etc.

Conclusion

In conclusion, it is evident that there are many misconceptions about cryptocurrency. However, with the proper research, it is possible to dispel these myths and gain a better understanding of how digital currency works. With this newfound knowledge, people can make more informed investment decisions and be less susceptible to scams.