7 things about cryptocurrencies that you’re better off not knowing

Why don’t people trust Bitcoin? Why should you wait to buy? When talking about crypto currencies, we often hear such words as “mining” or “hash” that leave most people scratching their heads. So we decided to see which aspects present a roadblock for cryptocurrencies on their path into the mainstream.

6 Total views
0 Total shares
7 things about cryptocurrencies that you’re better off not knowing

Why don’t people trust Bitcoin? Why should you wait to buy? When talking about crypto currencies, we often hear such words as “mining” or “hash” that leave most people scratching their heads. So we decided to see which aspects present a roadblock for cryptocurrencies on their path into the mainstream.

Mining

If a neophyte happens to ask a question like “what is Bitcoin?” - they are often presented with an explanation involving so-called miners and how these coins are created. But just how important is the money-creation process to the user?

Most likely, many automobile drivers who get behind the wheel each day have some abstract idea of how the car engine works. I suggest we don’t associate “mining” with gold mining since it’s hard to put the process of laboriously swinging a pick-axe in the same lane as some “complex computation process,” which is essentially done by a computer, while a miner only configures and monitors this process. 

Calling it “some type of computation process” is a pretty good way to describe the mining process. In all honesty, this process really does require knowledge and energy resources and, in present day, this is certainly not “easy money” that can be made out of thin air. But for the average user, fully grasping the Bitcoin mining process is not necessary. 

Anonymity

Bitcoins enthusiasts or, as they are often called, Bitcoin evangelists, always attribute anonymity as one of the main features of Bitcoin. Indeed, the currency itself along with electronic wallets and transactions are as anonymous as a suitcase full of dollars. 

The only non-anonymous aspect of this picture is the person holding this suitcase. The same goes for crypotcurrencies: unless your career revolves around de-anonymization but created an online wallet and posted it on Twitter, nothing will change - you will lose your anonymity online but the world will not collapse.

An no hacker will attempt to get into someone’s Facebook page in order to steal private messages. Because what will they find? What type of secret or confidential data could be stolen that the person should worry about? What more could be found besides maybe an old photo of them smoking a joint in a high-school bathroom many years ago. Therefore, any concepts of anonymity for the entire Internet should be left to people who are experts and are already working on such ideas

Limited number of coins

Yes, this is an important aspect of the currency as it is a defense mechanism against inflation. But is it important to always remind everyone by throwing out numbers? - 21,000,000 bitcoins. This does not really explain anything. If you have 1 bitcoin in your electronic wallet then you realize that you are the owner of a small slice of a huge pie.

This is why the total size of the pie is not really important. What’s important is the real-time value of each slice or bitcoin by itself for a specific person. You are not entering a fund or a commune; you are simply picking the most convenient currency for you. Just remember that your Bitcoins will never disappear i.e. they will not lose value as a result of inflation or a revolution etc.

Trading

Bitcoin-enthusiasts always get heated when hearing criticism about the exchange rate volatility of cryptocurrencies. This is because most people associate this instability with a turbulent economic situation or a financial crisis. It seems that one has to really be an expert in economic to use Bitcoins. Market analysts have been putting much fear into the public with constant predictions of a Bitcoin crash calling it a pyramid scheme etc. However, it appears that nothing has changed: once the price starts going up, everyone forgets about yesterday’s doom-and-gloom predictions.

The question of risk is very significant as well. If at the beginning of the month you converted a few hundred dollars into crypto currency to pay for lunch at a local cafe, the chances that you will lose this money are the same as with paper money if another economic crisis starts.

As with paper money, not all crypto currency users know about its potential risk, and some simply use the e-wallet for quick transactions or paying for goods online without having to go through lengthy payment system registration processes.

Decentralization

This word is often repeated by Bitcoin-evangelists as a sort of mantra, explaining the principles of data storage to novices. Of course, it is important that Bitcoin information is not stored at any one specific location, which makes it impossible to steal or damage them. Essentially, each user has access to information on all the other users in the network and on all transactions. This is excellent. This provides security and benefit to all participants. However, this only covers the issue of security. A person not familiar with the principles of P2P networks frequently reacts to this with skepticism: What is this decentralization? Anarchy? So then why should you worry about this? “Some type of enhanced technology for securing data” - the best explanation is usually the simplest one. 

 

×

Hottest Bitcoin News Daily

For updates and exclusive offers, enter your e-mail below.