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4 Key Misconceptions About Cryptocurrency

 Ian Balina  September 9, 2017  Featured            Tweet Share29 +1 Share6 PinShares 35It’s impossible to ignore the global rise of cryptocurrency. With Bitcoin becoming a better investment than gold and global institutions such as the UN adopting Bitcoin and Ethereum, it’s clear that crypto is here to stay. Despite its seeming inevitability, crypto remains mysterious to the average person. To many, the word “blockchain” is still gibberish. Lack of knowledge leads to misconceptions about the technology and lingering doubts about its value. During a recent discussion with Eric Lamison-White, Co-Founder of Pareto Network,  we covered common misconceptions surrounding cryptocurrency. Pareto  Network is a company that uses digital currency payments to incentivize  objective financial information within its network. 

4. I Can’t Sell My Assets Because There Aren’t Enough People Buying Cryptocurrency

“Bitcoin and cryptocurrency markets  have a lot of liquidity, with surges in activity every day,”  Lamison-White explains. “And while the market has its share of ups and  downs, instantly buying or selling Bitcoin at the quoted price is  actually a very straightforward procedure.”    Typically, a digital asset exchange  is involved with the exchange of cryptocurrency. One exchange that’s  been handling a large volume of transactions for several years now is Gemini.  It promotes transparency by scheduling public auctions at certain times  during the day where users can buy and sell millions of dollars worth  of crypto. Gemini and other exchanges function  like juiced-up stock markets. Not only can they function 24 hours a day,  7 days a week, but they cater to users all over the world. These aren’t  cloak and dagger operations – all you need is a desire to buy and sell  cryptocurrency. 

3. Bitcoin Is Too Prone to Theft to Be a Viable Medium of Exchange

As a former investigator of payment fraud for the Federal Deposit  Insurance Corporation (FDIC), Lamison-White knows a thing or two about  security. “It’s inaccurate to assume Bitcoin is  any less secure than other payment methods,” he says. “There are  $500,000 thefts happening every single day in fiat currencies. Fraud in  traditional payment networks amounts to hundreds of millions per year.  And companies like Square Inc list massive, crippling fraudulent  transactions in their annual reports.” Because crypto is a still an exotic  newcomer to the scene, it suffers from overexposure. Bitcoin thefts are  international news every time they occur, while the opposite is true of  traditional payment methods. There are best practices for crypto just as  there are for checks, banks, debit cards and wire transfers. 

2. Bitcoin Lacks Strong Regulation

“Name another asset class so heavily regulated!” Lamison-White laughs. The IRS and FinCEN within the  Treasury Department, the Commodities Futures Trading Commission, in some  cases the SEC, and numerous state institutions all regulate Bitcoin,  and lest you worry that this is too much governmental  oversight, Lamison-White assures, “The regulations have little effect  on either the consumer or trading experience.” 

1. Cryptocurrency and Bitcoin Require Electricity and the Internet. Gold and Cash Don’t

Even if the forecast calls for light  snowfall and a 30 percent chance of apocalypse, Bitcoin will remain a  viable means of exchange. Many people use Bitcoin without the internet  already. Storing crypto, completing transactions, checking their  balances – all of these activities are possible offline. Says Lamison-White, “Understand that  Bitcoin, the blockchain network, even the internet – these are all just  concepts, and concepts are very hard to eliminate. Two or more computers  are all that’s needed to create the internet and by extension a  blockchain network like Bitcoin.”  “Besides,” he goes on to say, “it’s  very hard to imagine there being a permanent loss of the internet and  power. Even if people lose individual access to the internet, it could  still exist in centralized areas, in the same way that libraries provide  internet access to the local community here in the US.” Instead of  trading bottle caps or seashells, humanity would be far better served by  a transparent managed money supply, such as Bitcoin. The day is fast approaching when  paying with Bitcoin will be as familiar as popping a quarter into the  parking meter. ICOs have created millionaires in less than three years.  It’s time for even the most resistant among us to educate themselves. 

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