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What Are the Top 3 Things People Get Wrong About Bitcoin?

Many (myself included) are extremely optimistic for the future of Bitcoin despite the volume of FUD that is continually thrown its way. The world appears to be on a clear path to hyperbitcoinization when Bitcoin becomes the global reserve currency.

For me, Bitcoin is the clear winner for a variety of factors sometimes left unconsidered.

Bitcoin is trending up

Here are the three reasons I consider Bitcoin without equal:

  1. Bitcoin cannot be influenced by any government or central bank
  2. It is the most secure monetary network on the planet
  3. It does not distinguish or discriminate between its users

Despite my bullish outlook on Bitcoin, I am an oddity when it comes to my close circle of friends and family. Regardless of how passionately I present the case for Bitcoin, they still aren’t able to shake the FUD that they are consuming.

If we are ever to move into a world of hyperbitcoinization we will need to first go through a period of mass adoption. Fortunately for us, education is the silver bullet to combating FUD, and orange pilling our loved ones.

Here are three of the most common assumptions that I have encountered from my friends and families, and how to respond if you encounter similar arguments against Bitcoin.

1) Bitcoin is a Tool for Criminals

Bitcoin is dark money. Bitcoin is untraceable. Bitcoin is used to purchase illegal drugs, guns, and make payments to hitmen. Or so we are led to believe in mainstream media and Hollywood. This misconception is the most difficult one to shake, as there is an element of truth to it from the early days of Bitcoin. When people say that Bitcoin is a tool for criminals to make payments on underground marketplaces, they are almost always referring to Ross Ulbricht or Maximilian Schmidt.

Ross Ulbricht ran the first darknet marketplace called the Silk Road where you could purchase illegal substances, and used Bitcoin as the payment method. Maximilian Schmidt went by the pseudonym Shiny_Flakes and almost single-handedly created an illegal online marketplace for drugs with payments being made in Bitcoin worth over $4 million in 2015. These men have been galvanized by libertarians and elevated in pop culture with the release of a documentary and tv series on Netflix based on the Shiny_Flakes story.

While I don’t necessarily disagree with the libertarian values they are espousing. I don’t believe their stories benefit the Bitcoin community on the whole and are more likely to dissuade people from entering the marketplace. We should instead be trying to attract more people to Bitcoin through the advantages it offers over traditional legacy banking systems and its promotion of civil rights across the globe.

Bitcoin is Not That Useful for Criminals

The ironic thing about the narrative of Bitcoin being a tool for criminals is that Bitcoin is a decentralized distributed ledger that can be accessed by anyone with an internet connection. This means that blockchain forensic analysts can monitor transactions and detect when wrongdoing is taking place. Meanwhile, our legacy banking systems are reeling from the release of the Pandora Papers that exposed billions of dollars hidden away in shell companies throughout tax-havens. Private banking mandates are still the greatest protection for those who wish to launder money or conduct crime. Bitcoin fixes this by not hiding a single thing about the transactions that take place on the network.

We are moving into a more regulated world wherein exchanges have to keep track of, and report suspicious transactions. With more regulation comes an additional level of comfort for people new to Bitcoin. We should expect to see more people start buying Bitcoin as a result, as long as we get away from the false criminal narrative.

2) Bitcoin is Bad for the Environment

This is one of the most common misconceptions that people have about Bitcoin and one that is most likely to be advertised in the mainstream media and that would be that it’s terrible for the environment. Right off the bat: It is undeniable that Bitcoin consumes an immense amount of energy to secure the network. Approximately 113.89 terawatt-hours (TWh) per year (2021). This energy consumption is often put into the context of how it compares to smaller nations, like Malaysia. These kinds of comparisons are selective and do nothing to account for the benefits that securing the Bitcoin network achieves.

Bitcoin is used as a store of value, a medium of exchange, a settlement layer, and a way to offer 1.7 billion unbanked people access to financial instruments for the first time. So rather than draw comparisons to smaller nations’ energy consumption, we should instead look to compare it to the very thing it is offering an alternative to. Bitcoin is often referred to as digital gold as a store of value. The gold industry consumes 240.61 TWh per year, more than double what Bitcoin does, yet this comparison is rarely drawn. Similarly, to the gold industry, the legacy banking system consumes 263.72 TWh per year, again more than double what Bitcoin consumes.

Only through spending this amount of energy through the proof of work protocol can the network remain robust and secure. The energy expenditure to secure the network is exactly the thing that gives it its strength. True decentralization, across tens of thousands of nodes, constantly securing the network, all racing to mine the next block. This process ensures that no one single miner can ever have enough influence over the blockchain to corrupt it or any of the data in it.

There are also other solutions to Bitcoin’s massive energy usage, such as using a layer-2 like Lightning.

3) Bitcoin is Too Expensive

How am I supposed to afford to start buying Bitcoin if it is already $50,000 USD? While yes, there will only ever be 21 million Bitcoins mined, each and every Bitcoin can be divided into 100,000,000 individual units called Satoshis. This may seem a bit trivial for anyone that has spent time around Bitcoin. However, for those who are at the start of their journey into Bitcoin, it is one of the biggest mental hurdles to overcome.

Many people who would like to purchase Bitcoin see this price tag and make the assumption that the price of 1 BTC is the entrance cost. They falsely equate it to purchasing property, a new car, or any other large purchase. They are then immediately put off their initial interest in Bitcoin and opt to deploy their capital elsewhere. This dissuasion is often compounded subconsciously every time they read an article about a new all-time-high or hear the daily business report believing it is too late for them to start buying Bitcoin.

While the other two misconceptions I have mentioned before are a result of reports and misinformation spreading. This misconception is often one that people arrive at on their own accord, and they tend not to seek out any information to the contrary. It is the easiest misconception to approach people about. It is a great way to start a conversation and an opportunity to teach someone the basics of Bitcoin. I also firmly believe that when Bitcoin reaches $100,000 USD, we will see a tsunami of people flood into the markets due to FOMO. At $100,000 it is easy to comprehend and divide satoshis into basic units for people. At that price, 1 satoshi would equal 0.1 cents, and I believe that this is when we would start to see the first stages of mass adoption occur.

I am excited for a world where Bitcoin becomes the dominant means of transacting value. While the FUD will certainly intensify as we reach mass adoption, hopefully now you have a few tools to fight back.

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Iain Taylor

About the Author

Iain Taylor

Iain Taylor grew up in Northern Ireland, and is currently living in Halifax, NS. He has quadruple citizenship status, and has been involved in cryptocurrency since the end of 2020. He completed a study in Bitcoin, Blockchain Technology, and Cryptocurrencies at Dalhousie in 2021, and has been writing on the industry since September 2021.

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