Bitcoin misconceptions - and anything that is not true of them - Part two
Continuation and also the closing part of yesterday's article
4. Misconception: Bitcoin is a digital tool so it can be hacked at any time (or crypto misconceptions at best)
(Photo credit: Pixabay)
Bitcoin was created in 2009, and since then the blockchain has suffered quite a few hacker attacks: quantified to be exactly zero since its inception. Of course, just because something hasn’t been hacked so far doesn’t mean it’s impossible. However, there is a very good reason why this has never happened before.
The high degree of security of bitcoin is largely based on the principle of decentralization. Distributed general ledger technologies such as blockchain allow each piece of information that is uploaded to the blockchain to be stored on countless nodes (one copy of the distributed general ledger). This means that it is not enough for hackers to break into one place and change the data stored in the system. Changing one node will not automatically change the data stored on the other nodes.
The only option for a successful attack would be for hackers to be able to change more than half of the nodes at once, which, however, is an almost impossible task for bitcoin today. This is called the 51% attack, which has already occurred several times for smaller altcoins.
Nonetheless, it is undeniable that we have all heard of quite a few hacker attacks in the context of bitcoin. However, they do not concern the bitcoin blockchain, but the portfolios suitable for storing bitcoins and the exchanges and bills that allow cryptocurrency trading. This is because the different wallets and switches work with a completely different mechanism than the bitcoin block chain itself. And their safety standards vary considerably.
Thus, although we should not be afraid of breaking the bitcoin blockchain, as a beginner it is very important to get acquainted with the offers of different ministries and stock exchanges. For these, security is no longer as essential as it is for bitcoin. Cold and hot wallets, i.e. cold and hot wallets, for example, can all present other advantages and disadvantages.
5. Misconception: Bitcoin is completely anonymous
(Photo credit: Pixabay)
No, this statement is not true at all. Bitcoin is not anonymous; cryptopen is most often referred to as a pseudonym. All bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the transactions and balances of all bitcoin addresses at any time. Of course, this bitcoin address does not contain our name, so it cannot be traced back to us until we sell it or it can be inferred from a payment. Just think that most exchanges and stock exchanges are required to comply with international KYC (know-your-customer) standards. As part of this, we need to prove with official documents that we are actually using the account.
Nonetheless, there are security measures we can use to enhance our “anonymity”. (For example, we use a BTC address only once and use dynamic wallets that always generate a new address). However, perfect anonymity will never be achieved this way either.
Again, we can only see that bitcoin - although many still have a reputation for being closely linked to darknet markets - is not really suitable for illegal activities, as it does not provide anonymity then, as most people believe.
6. Misconception: Bitcoin is too complicated for the average person
(Photo credit: Pixabay)
Words like hash rate, private keys, or cryptography can easily frighten the average person who has never heard of anything like it. Even if he had heard, he certainly could not give more than two words as an explanation. Thus, the bitcoin misconceptions that presuppose serious expertise behind the use of bitcoin can be fully understood.
However, bitcoin, although it has a technologically complex background, has become a fairly easy-to-use tool today. Buying, storing and using bitcoin is now taking such a user-friendly form that even someone who has never dealt with something like it can easily learn it. In most places, we can buy bitcoin with just a few clicks. Most online wallets simply mean downloading an application. We can also get information about our portfolio in a few steps, or we can transfer our cryptocurrencies to another address.
This is not to say that it is not worthwhile to learn as much as possible about the operation of bitcoin or other altcoins - be it about its technological basis, investment or payment options. It is not worth embarking on anything without looking after it. Nor does one start gardening by spraying unknown seeds on top of the earth and then waiting for a miracle. Nonetheless, we don’t need to become an IT professional or a financial advisor to be proud bitcoin owners too - the thing is much simpler than that.
In addition, we now have a number of resources at our disposal to make it easy and transparent to learn about cryptocurrencies. A plethora of books, articles, bitcoin guide posts, podcasts await us; in addition, many of them are often available in completely free form. There are opportunities for beginners as well as those who are already experienced. After learning the basics, we can delve thematically into areas such as other uses of blockchain technology or, for example, what bitcoin ETFs are.
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