5 myths about Bitcoin were dismantled

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Welcome to the second article in our new Bitcoin series. Previously, we talked about what a bull run is, and today we talk about common misconceptions about Bitcoin.

Bitcoin, like the first-ever cryptocurrency, has some pretty serious misconceptions and stigma attached to it. It has had a rocky introduction to the finance world, it is true. But that doesn’t mean we can’t dispel some common myths.

1. Isn’t Bitcoin a scam?

Short answer: no. Bitcoin is a digital currency and payment network that only exists online. Apart from central services offered by banks or fintechs there is a big difference in how Bitcoin operates: the whole thing lives on a decentralized network secured by cryptography (you may have heard of this as a “blockchain”) ). The beauty of this is that you don’t need a third party or middle man to complete transactions.

The reason people might think of it as a scam might be because it is not run by a bank or government, and in its early days it was used in criminal activity, and there have been cases of hackers and scammers stealing bitcoins.

This is reason enough for anyone to be skeptical. However, one could argue that cash, used worldwide, has also had a troubled past (and present) in crime and money laundering – sometimes even from those who supply it to the public!

So no, Bitcoin itself is not a scam, however we have to be wary of hackers, scammers and other online threats such as malicious software (just as you should with real thieves). You can learn how to keep your money safe here.

2. Isn’t it too late to buy Bitcoin?

Now we have the scam question out of the way, which is probably the most common myth: you feel you’re late for the game and that Bitcoin is already at its peak. Well, while we cannot predict the future and would like to emphasize again that Bitcoin is a risky investment, it is quite clear that Bitcoin is still a very young asset compared to eg gold or stocks.

Also, as Bitcoin is on its way to disrupting physical gold and is becoming increasingly known in the world of finance as “digital gold”, we can say: it’s never too late to buy Bitcoin. Keep in mind that the price is volatile and constantly changing. At the time of writing, we are going to run a bull, as the price of Bitcoin slowly increases to the all-time high of $ 20k. But this is not to say that Bitcoin will stay at $ 20k, the price could plummet next week or even tomorrow just as quickly. Today’s price is not a reflection of future demand.

To make it clear, it is definitely not too late to buy Bitcoin. In fact, you might even be a little early for the party. Buying Bitcoin is an investment, ideally in the long run. A good strategy is to set up a savings plan and invest a small amount such as eg € 50 a month. With this strategy you remove the element of emotion when prices go up and down.

3. Isn’t Bitcoin extremely risky?

Every investment has the element of risk – that fact cannot be circumvented. You have to go to any investment option with the mindset that you could potentially lose some, or even your, money. However, Bitcoin is over ten years old (a dinosaur asset in crypto years!) And on its way to becoming more and more considered digital gold and with store-like features of value.

An element of risk, of course, is the possibility of hacks and scams. Most security issues, such as hacks, are caused by human error rather than computer error. For this reason, you need to have strict security measures in place, including 2FA, and have a secure wallet (don’t worry, you’ll get one of these when you sign up for a broker) and used to store the private and public keys needed for all types of transactions. You must not lose this key to your wallet, just as you should not lose your physical wallet with cash or your bank card.

So yes, there is a risk to Bitcoin, just like all investments. It’s an important rule that you should always invest only what you can afford to lose. Read more about keeping your cryptocurrencies safe in our Bitpanda Academy article.

4. Isn’t it extremely complicated to buy and hold Bitcoin?

Contrary to what you may think, Bitcoin is as easy as booking a taxi! At least on Bitpanda. Usually it only takes a few clicks and there you have it! You can be holding Bitcoin. We have a detailed step-by-step guide on how to buy Bitcoin on Bitpanda here, where we can walk you through it.

We promise you that you do not need to be an expert or even very tech-savvy. Not to mention you don’t need a lot of money to get started, which brings us to our next point.

5. Isn’t it very expensive to buy Bitcoin?

This depends on the price at the time of purchase. But the best thing about it, is that you don’t have to buy whole Bitcoin! I mean, good for you if you can afford to make that investment, but if you don’t have that kind of money lying around, you can actually buy, for example, € 25 worth of Bitcoin (which is also happens to be the minimum amount. a deposit amount on Bitpanda to get you started)!

Investing doesn’t have to be expensive, there are many options for budget investing, average cost plans and investment savings accounts. Don’t make the mistake of thinking that you need to get rich in order to invest. After all, our vision at Bitpanda is to make investing accessible to everyone. So start today, be patient and stay safe out there!

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