One of the biggest barriers stopping cryptocurrencies from becoming widely accepted is a lack of understanding. Unfortunately, ignorance breeds misunderstanding, which has resulted in many false beliefs about digital assets that have discouraged mainstream people from embracing the decentralized economy. These crypto myths are paralyzing investors from creating a strong portfolio.

With the cryptocurrency market in a bear cycle, things are even worse when the myths appear accurate. But when everyone is free from the mind-numbing joy that comes with rising prices, what better moment to dispel these terrifying crypto tales?

Here are some of the myths about the cryptocurrency sector that are most frequently held.

Crypto Myth No. 1: Cryptocurrencies all function the same

Currently, there are nearly 21,000 cryptocurrencies in use. While some cryptocurrency currencies and tokens compete with one another, others are made to fulfill distinct functions.

One such example is Bitcoin, which Satoshi Nakamoto created as a decentralized peer-to-peer electronic cash system that enables users to exchange value without the use of middlemen like banks. Ethereum, on the other hand, was created as an ecosystem to help the creation of decentralized apps.

Crypto Myth #2: Cryptocurrency Is Worthless

This is arguably the biggest cryptocurrency fallacy. The concept of “value” is arbitrary since different objects may have various values in different contexts. A digital asset increases in value when enough individuals acknowledge its worth. Because of this, cryptocurrency traders and institutional investors alike think that cryptocurrencies have value in and of themselves.

Numerous elements, like price, utility, competition, media attention, security, regulation, and availability, affect a cryptocurrency asset’s value.

Crypto Myth #3: Cryptocurrency Is Unlawful

Because they believe that digital assets are unlawful, many people are reluctant to use cryptocurrency. But because each nation views cryptocurrency differently, this is only partially true. While cryptocurrency-related activities are prohibited in some countries, including China and Algeria, other nations, including El Salvador, the Central African Republic, the United States, and the United Kingdom, have legalized cryptocurrency or created regulations that take into account digital assets.

This week on the community-owned crypto show @coinage_media, we sat down with the one person who had openly called out FTX over excessive leverage years ago ⬇️ @CaitlinLong_ warned us and she was right. Now, she’s also building a legal crypto bank in Wyoming to fix the issue 🧵 pic.twitter.com/NqvPETfNdA

— Zack Guzmán (@zGuz) November 22, 2022

Interestingly, nations like India and Russia, where crypto transactions were previously outlawed, have lifted the restriction and now permit their citizens to engage with the asset class.

Also, read – Top 12 Crypto Hacks In 2022 And What We Learn From Them

Crypto Myth 4: Cryptocurrencies are unregulated

Many people are hesitant to jump on the cryptocurrency train because they believe the industry is totally unregulated. This is because cryptocurrencies are quickly turning into a necessary component of the world financial sector. Regulators are getting more involved in the sector, despite the fact that crypto is still a risky platform. For instance, as part of its efforts to safeguard investors, the United States Securities and Exchange Commission (SEC) increased its workforce early this year.

Similar to this, crypto organizations like Binance often work with regulators worldwide to provide digital asset services compliant with regional laws. The largest blockchain ecosystem in the world, Binance, understands that increased regulation will encourage larger adoption, give more underprivileged populations more financial independence, and dramatically better countless lives all over the world.

Crypto Myth #5: Cryptocurrencies Are Mostly Used by Criminals

Critics of cryptocurrencies claim that because they are untraceable, criminals mostly employ cryptocurrencies for illegal activity. But it’s not totally accurate.

The extent to which the press was duped by SBF exceeds even the level that investors were. Indeed, the press was indispensable to the scam by inventing the myth of a benevolent crypto king. @AshleyRindsberg @tabletmag https://t.co/WUQGjvKDVR

— David Sacks (@DavidSacks) November 19, 2022

Bad actors continue to use traditional currencies despite some criminal groups using cryptocurrency for dubious ends because blockchains leave digital breadcrumbs that law enforcement and crypto analytics companies may use to follow offenders. Furthermore, in accordance with anti-money laundering regulations, cryptocurrency platforms now demand that users give their details.