In this article we are diving deep into the world of Bitcoin to bust some persistent myths that have been floating around. At Bitaroo, we're committed to providing accurate, reliable information about this revolutionary form of money. In this article, we'll examine and debunk three persistent myths that have been circulating in financial circles, arming you with facts and expert insights to make informed decisions about Bitcoin.
Myth 1: "It’s too late to invest in bitcoin”
If we had a sat for every time we heard this one, we'd be swimming in digital gold. This is a common misconception, but the data suggests otherwise.
Bitcoin's journey is far from over; in fact, it's still in its early stages. Consider the following:
- Adoption is still in its early stages: recent data shows that awareness level of Bitcoin is high. Globally, it is estimated that at least 2 billion people (25%) have heard of Bitcoin, but only very few (0.4-1.3%) actually own it.
To illustrate just how early we are on the adoption curve, in 1999, global internet adoption was around 4% of the world's population. At that time, the estimated number of internet users was approximately 150 million. Internet usage was still in its early stages, with limited access in many regions, especially in developing countries. The year 1999 was also notable as it was just before the dot-com boom, which significantly accelerated internet adoption in the early 2000s.
BlackRock, a global asset management giant, acknowledges that Bitcoin adoption is accelerating faster than the rise of the Internet and mobile phones. It is worth noting that this growth is occurring despite a significant smear campaign by main stream media, global legacy finance organisations and various governments, unlike what was seen during the early days of the Internet and mobile technology. - Bitcoin's potential as global money: Bitcoin is positioned to become a global, borderless currency. As more countries face economic instability and hyperinflation, Bitcoin's role as a store of value and medium of exchange will only grow. El Salvador's adoption of Bitcoin as legal tender in 2021 is just the beginning.
Additionally, there are now suggestions that Argentina might follow suit, along with a proposal for a strategic Bitcoin reserve in the U.S. If widely adopted, Bitcoin could enhance financial inclusion, particularly in regions with limited banking access, and provide a stable alternative for those struggling with currency devaluation. This transformation might empower individuals and businesses, redefining money in an increasingly interconnected world and potentially reshaping our financial systems for the better. - Institutional adoption is ramping up: Major companies like MicroStrategy, Tesla, and Square have added bitcoin to their balance sheets. This trend is likely to continue as more corporations recognise Bitcoin's potential as a hedge against inflation.
- Technical development continues: The Bitcoin network is continuously improving. The adoption of SegWit, the development of the Lightning Network, and ongoing enhancements are making Bitcoin more scalable and efficient.
As Bitcoin pioneer Andreas Antonopoulos puts it:
"It's never too late to get involved in Bitcoin. We are still in the very early stages of this technology."
Remember, Bitcoin's finite supply of 21 million coins means that as adoption grows, so does its potential value.
Michael Saylor famously declared, "Yeah, I'll be buying at the top forever," and he has remained committed to this belief, amassing a personal holding of 17,732 bitcoin (BTC), according to Forbes. Additionally, his company, MicroStrategy, has acquired over 244,000 bitcoins.
Moreover, you don't need to buy a whole bitcoin to get started. Thanks to its divisibility (each bitcoin can be divided into 100 million sats), you can start with any amount you're comfortable with.
Myth 2: "Bitcoin Has No Intrinsic Value"
This claim often stems from a misunderstanding of what gives money value. Bitcoin's value is derived from its unique properties:
- Scarcity: There will only ever be 21 million bitcoin. This hard cap on supply is written into Bitcoin's code and enforced by network consensus. Unlike fiat currencies that can be printed at will, leading to inflation, Bitcoin's supply is mathematically certain.
- Decentralisation: No single entity controls Bitcoin. It's a peer-to-peer network maintained by thousands of nodes worldwide. This makes it resistant to censorship and control by any government or organisation.
- Security: The Bitcoin blockchain is secured by an enormous amount of computing power through a process called mining. As of 2024, the Bitcoin network's hash rate is over 400 exahashes per second, making it virtually impossible to attack or manipulate.
- Borderless transactions: Bitcoin allows you to send value anywhere in the world, at any time, without intermediaries, 24/7/365.
- Programmable money: Bitcoin's base layer can be built upon. Innovations like the Lightning Network are making micro-transactions and new financial applications possible.
The concept of "intrinsic value" is often misunderstood. Even gold, often cited as having intrinsic value, derives most of its worth from its monetary properties rather than its industrial uses. Bitcoin, as a superior form of money, derives its value from its monetary properties and network effects.
Bitcoin's value is derived from the network of people who use and understand it. Bitcoin's monetary policy is predetermined and unchangeable, not subject to the decisions of bankers or governments.
Myth 3: "Bitcoin and Crypto Are the Same"
This is a fundamental misunderstanding. While Bitcoin was the first blockchain-based digital asset, it stands apart in its monetary properties and security model. Here's how Bitcoin differs from other digital currencies:
Bitcoin is fundamentally different from other digital currencies in several key ways:
- True decentralisation: Bitcoin has no central authority, no foundation, no company behind it. It was launched fairly, with no pre-mine or initial coin offering (ICO). Other digital currencies often have centralised leadership and pre-mined coins.
- Immutable monetary policy: Bitcoin's supply cap of 21 million is set in stone. Many other digital currencies have inflationary supplies or monetary policies that can be changed by their developers.
- Security and network effect: Bitcoin's proof-of-work consensus mechanism, combined with its massive network of miners and users, makes it by far the most secure and robust blockchain network.
- Focus on being money: Bitcoin is focused solely on being the best form of money humanity has ever seen. It is not trying to be a "world computer" or solve every blockchain use case. This focus allows it to excel at its primary function.
- Lindy effect: Bitcoin has been around the longest and has survived numerous challenges, growing stronger each time. This track record gives it a significant advantage in terms of trust and reliability.
Legendary Bitcoin maximalist Saifedean Ammous, author of "The Bitcoin Standard," explains:
"Bitcoin is the only cryptocurrency that has a credible claim to being a hard money or sound money."
Conclusion: Consider Bitcoin as Part of Your Financial Strategy
We have examined three common myths about Bitcoin and provided factual information to counter them. At Bitaroo, we are dedicated to introducing Australians to the hardest money ever created.
Remember, Bitcoin adoption is still in its early stages, its value is derived from its unique properties as money, and it stands apart from other digital currencies. We encourage you to continue your research and consider how Bitcoin might fit into your financial strategy.
