Busting Bitcoin Myths
Bitcoin has attracted its fair share of media attention – and some negative perceptions held by merchants and consumers are hard to shake. To what extent is this justified? Or are there myths that can be dispelled? Bernard Kaufmann, General Manager, Payment21 contributed the following guest blog post to do some cryptocurrency ‘mythbusting.’
Myth #1: Illegality
Yes, various scams, hacks and other crimes have been reported but let's keep this in perspective. Today, criminal activity is mainly conducted in legal tender and according to Europol, organized crime earns around 1.5 billion EUR per year from payment card fraud. The FBI has said that criminals can't hide behind bitcoin because investigators can follow the money by tracking financial data publicly.
Myth #2: Not Secure
To draw a simple comparison, cryptography is a very strong knot, easy to make but hard to undo. fact, Bitcoin is unforgeable, and account holders are highly protected. Not even the NSA has been able to hack it.
Myth #3: Not Coherent
We have to look at the evolution of money. Bitcoin technology is so secure that some central banks (e.g., China) are considering issuing digital money in addition to paper money. That would be a whole new level of coherence. Bitcoin would be easily interchangeable with government money.
Myth #4: Too Volatile
In fairness, I don't want to downplay bitcoin's rollercoaster performance over the past several years but this kind of volatility is normal for a new currency. Looking at the current situation, bitcoin volatility is at 1.2% - 2,5% over a 1-6 month time period.
Myth #5: Not Compliant
First of all, bitcoin is not anonymous. Bitcoin is pseudo-anonymous. Pseudo-anonymity can be enhanced by associating customer identities to make bitcoin transactions AML-compliant. In the future, market players are going to be divided into those that are AML-compliant and those that are not.
Payment21 is committed to building trusted networks and making the digital payments ecosystem compliant, secure and more user-friendly. The venture has also been recognized for its high security standards in processing cross-border transactions. The company has been dealing with alternative payments methods for more than a decade. The owner of the Payment21-brand is a registered financial intermediary executing the legal obligations set by the Swiss Financial Market Supervisory Authority (FINMA).
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