JOFF PARADISE EXPOSES
BITCOIN MYTH #1:
THE NETWORK IS FAILING
From June to November of 2019 Bitcoin dropped nearly 50% in price leaving some to question if Bitcoin’s network is failing. Not true. Bitcoin’s network is larger than it has ever been and continues to grow each year as people learn about what Bitcoin is and what it does. More countries and banks each year are starting to recognize Bitcoin as a faster, cheaper and more secure form of payment. It is now much less complicated to invest in crypto than traditional markets.
Bitcoin can be purchased on a smartphone using an app in seconds and younger generations are adept at navigating the process. Buying, selling, sending, receiving – can all be accomplished without the need of a bank which will propel mass adoption and continued growth of the network. The Bitcoin network is here to stay.
BITCOIN MYTH #2:
ANONYMOUS AND ONLY USED FOR CRIMINAL ACTIVITY
The bitcoin myths about it only being used for criminal activity because it is anonymous are untrue. Every Bitcoin transaction leaves a digital footprint on the blockchain. This means that Bitcoin transactions are some of the most transparent and traceable in the world. While the name of the person who made the transaction is unknown, the transaction itself is recorded unlike a hand-to-hand cash transaction that leaves no record at all. Studies continue to prove that less than 1% of illegal activity is carried out by using Bitcoin. Cash is still king for illegal activity.
BITCOIN MYTH #3:
UNSAFE AND CAN BE HACKED
Since the dawn of the internet hacking by criminals has always been a huge issue leaving many to wonder if their Bitcoin can be hacked and stolen. This is one of the most difficult bitcoin myths to dispel because few understand the difference between Bitcoin and the exchanges on which it might be stored. Some Bitcoin exchanges have been hacked in the past, and Bitcoin has been stolen. This happened because these exchanges had inadequate security that allowed the hackers to get in and steal – but this was unrelated to the actual Bitcoin. Great attention has been given to this issue and the results are that it is harder than ever for hackers to obtain funds.
BITCOIN MYTH #4:
IT IS NOT ENERGY EFFICIENT
This particular bitcoin myth is really nothing more than a talking point for the uneducated. Keeping energy costs to a minimum has always been the biggest hurdle for Bitcoin miners. Mining rigs use a lot of energy and, depending on where a miner lives, this can effect profits greatly as rates vary from country to country. South Korea is the most expensive with a whopping $26,000 to mine a Bitcoin. Mining in Venezuela, on the other hand, puts the average cost around $550. It is estimated that in the USA it costs around $4,700 to mine one Bitcoin. Solar energy is popular with some of the large mining farms that use huge amounts of electricity.
Despite the cost – it is still far cheaper to mine Bitcoin than to dig up and process gold. While it does require a great deal of computational power to unlock a bitcoin – electricity is 90% of the cost to mine it. Banking consumes an estimated 100 terrawatts of power annually – whereas mining Bitcoin uses an estimated 30 terrawatt hours annually. So, to put this in perspective – should bitcoin technology mature by more than 100 times its current market size, it would consume only 2% of all energy consumption, with very little additional costs involved. Miners are migrating to areas where hydropower, a low-carbon resource, is available and cheap. Not all types of energy generation are equally impacting the environment, and the world does not rely on the same types across states, countries or markets. Hence Iceland is now popular for bitcoin mining, with nearly 100% renewable enery used for its production.
Many fail to understand the benefits of renewal energy systems miners are adopting to create Bitcoin. Focus should be placed on where the power comes from vs. how much energy is used.
Bitcoin generates both feverish excitement and harsh criticism, depending on the speaker. Investors see speculative opportunity in the form of trade in a market that currently has little regulation and offers huge gains. Others confused about the technology of bitcoin make completely false claims, but few listening have the knowledge required to rebut with the truth. Emerging technology always hit the ground with higher, energy-intensive costs and, over time, they become more efficient. This is the case with trains, planes, autos, computers, phones, even washing machines and microwaves. Instead of making bitcoin the “fall guy” for every energy-conscious discussion, it might behoove you to educate yourself about this new, vaguely understood and rapidly growing industry.