Bitcoin Beginner Series EP4. 5 Misconceptions

5 Common Bitcoin Misconceptions Many People Still Believe

 

"Bitcoin is a Ponzi scheme."

"Bitcoin is worthless and intangible."

"Only criminals use Bitcoin."

Many of you have likely heard these misconceptions to some extent, and sometimes they can lead to misunderstandings about Bitcoin. Today, we will clarify these doubts and explore 5 common misconceptions.

 

1. Bitcoin was created for illegal activities

One of the most common misunderstandings is that "Bitcoin is for money laundering or used on the Dark Web."

While it's true that some people use Bitcoin for illegal activities, it doesn't mean Bitcoin was created for that purpose. Bitcoin is essentially a type of "money" that possesses all the characteristics of good money:

• Store of Value
• Medium of Exchange
• Unit of Account

Every type of "money" can be used for good or bad. For instance, cash, gold, or even real estate have been used in illegal activities, but we don't say that cash was created for money laundering, or real estate exists solely for that purpose, do we?

In reality, global agencies like the FBI and Interpol view Bitcoin transactions as "easier to trace than cash transactions" because every transaction is recorded on the Blockchain, a transparent and auditable ledger system.

Therefore, it cannot be concluded that Bitcoin was created for illegal activities. The truth is, any "money" or "asset" can be used inappropriately. What matters is the user's intent and usage, not the asset itself.

 

2. Bitcoin is a Ponzi scheme / scam

Many wonder, "Is Bitcoin really a Ponzi scheme?" First, let's understand what a Ponzi scheme is.

A Ponzi scheme is a fraudulent investment operation that pays returns to earlier investors with money taken from later investors. It deceives the public into investing by claiming they will receive substantial profits quickly, often paying out in the initial stages to gain trust. In reality, it conducts no actual business or investment. "It merely uses funds from later investors to pay earlier investors." This system relies on new money to pay old money and eventually collapses.

However, Bitcoin does not have such a structure.

• Bitcoin has no owner, no company, and no organization controls it.
• It does not promise any guaranteed returns.
• You can buy Bitcoin on a free market, and its value depends on the supply and demand of the market.

Ponzi schemes existed long before Bitcoin. Those who use Bitcoin in Ponzi schemes are "scammers," not Bitcoin itself, just as some Ponzi schemes use cash or gold for deception, like the Mae Chamoy scheme.

 

3. Bitcoin has no value because it is intangible

Some believe that "Bitcoin has no value because it's just digital code or intangible."

If we consider it carefully, we will find that many things around us that seem to have "value," such as paper money, gold, or even stocks, do not inherently possess value. Their value comes from the collective belief and acceptance of people in society, known as Subjective Value.

Gold gains value because of its scarcity, durability, and desirability among people in society.

Bitcoin also shares these characteristics:

• Scarcity – Limited to 21 million coins; requires significant electricity for mining.
• Durability – Cannot be destroyed like physical cash or systems.
• Desirability – People worldwide are beginning to understand Bitcoin more, increasing its demand.

"Gold is the money of gods, but Bitcoin is the money of the people" because it allows everyone free access and ownership. Everyone can access Bitcoin.

Therefore, if something has market demand, is widely accepted, and can solve certain problems for society, that thing will have value. People in society will value it, whether it is tangible or intangible.

 

4. Bitcoin is not secure, susceptible to hacking

Many people fear that "Bitcoin might be hacked or its system could collapse."

The truth is: the Bitcoin system "has never been hacked" since its launch in 2009.

Bitcoin uses Blockchain technology, a highly secure, transparent, and auditable system. Every Bitcoin transaction is recorded as a Block and linked together in a Chain, making it almost impossible to alter past transactions.

What often gets hacked is not Bitcoin itself, but rather human error and exchanges, such as:

• Using easy-to-guess passwords
• Storing Bitcoin on untrustworthy platforms
• Carelessness in usage

How to prevent and reduce risks:

• Enable 2FA (Two-Factor Authentication)
• Choose a reputable exchange or one regulated by the SEC.
• Learn how to properly use a hardware wallet for Bitcoin (Self-custody).

Bitcast is an authorized reseller in Thailand. For more details, please visit our Facebook fan page: Bitcast or https://thaibitcast.com/. We offer after-sales service throughout the usage period, a 1-year warranty, and instructional videos and reviews on how to properly use a hardware wallet.

 

5. Bitcoin harms the environment

Some believe that "Bitcoin uses too much energy, causing pollution."

Although Bitcoin mining uses a lot of energy, it doesn't mean Bitcoin is destroying the environment.

In game theory, Bitcoin miners are incentivized to find the cheapest energy sources. Due to the high cost of Bitcoin mining, the most profitable approach is to seek the cheapest energy, which often comes from clean energy sources, thus increasing the trend towards clean energy. For example:

• Hydropower – Used in Bitcoin mines in Canada and China.
• Wind and solar power – Increasingly being adopted.
• Waste energy – From power plants or geothermal energy, such as El Salvador using volcanic energy for Bitcoin mining.

Therefore, the perception that "Bitcoin is destroying the planet" might not align with the changing facts today.

 

Summary

 Bitcoin is not what many people think it is.

• ✅ Bitcoin is not for money laundering – transactions are transparent and auditable.
• ✅ Bitcoin is not a Ponzi scheme – no one owns it, no fraudulent returns.
• ✅ Bitcoin has value – because it is a rare and immutable digital asset.
• ✅ Bitcoin is secure – the Blockchain system is designed to withstand attacks.
• ✅ Bitcoin is not destroying the planet – increasingly uses clean energy.

 

If you are interested in learning more, you can watch the full content here: 5 Common Bitcoin Misconceptions

If you've read this far, don't let misunderstandings make you miss the opportunity to learn about the future of finance! // Admin Tee 🟠