blog posts

8 Common Concerns About Bitcoin And Their Answers

Are you thinking of buying too? Bitcoin it is too late? Or do you feel that because Bitcoin does not exist outside of the Internet, it may suddenly lose all its value? 

Toby Hazlewood, a well-known trader and author on the Medium website, in an essay Responds to 8 misconceptions about Bitcoin.

 According to Hazlwood, these eight misconceptions can hold you back from investing, and for the reasons he points out, it’s best to reconsider. 

First of all, it would be good to say that there is no personal benefit to me (author: Toby Hazelwood) in encouraging you to invest in Bitcoin.

 We all have some ability to be adventurous and risk-taking, and we also want security. 

Also, our skepticism in the face of many aspects of modern life is undeniable.

Bitcoin and digital currencies are also among the concepts that (due to their modern and somewhat unfamiliar nature) cause many people to be confused and confused. My purpose in writing this article is to address the concerns that both you and I may face.

I invest in digital currencies with little purchase Bitcoin And then Etheruem I started in early 2021; That is, just when the price of each of these currencies skyrocketed. In fact, I used the silly “buy first and then learn” approach to investing in these coins.

I am now trying to learn new things by looking at and analyzing past experiences and reinforcing my learning by sharing what I have learned.

In this article, I will look at some of the common misconceptions, fears, and pessimisms about investing in Bitcoin, and explain why I think many of them are irrational and exaggerated.

1. Bitcoin is virtual, so it can not be valuable

7 Common Concerns About Bitcoin

Bitcoin is designed in such a way that it has no appearance, financial support or central control organization, and for this reason, many believe that bitcoin is worthless.

An issue that is being overlooked here is the fact that other non-digital currencies are in fact the same.

The paper money offered by governments is valuable only because we all agree on its value and participate in the human and collective system that is formed around its use. When we check our bank account balance online or using an ATM, we believe that the numbers on the screen indicate the value of our money, even if we are unable to touch it.

Over time, man has agreed in a collective agreement that anything from oysters to pebbles and small beads can be used as a symbol of value storage and purchasing power. 

This collective agreement is the key to the work of Fiat currency-based systems. The truth is that the same can be said for Bitcoin.

Some may argue that gold has an intrinsic value, and even if we want to consider the financial value of gold per ounce as a contractual agreement, the gold metal itself can be used in the field of electronics to make decorative jewelry. As a result, the metal is inherently valuable.

The truth is that the value of gold is due to a combination of two factors of collective agreement about its value and relative scarcity and limited supply. This collective agreement is very effective in determining the value of gold, and on the other hand, the scarcity of gold resources and the limitation of its extraction and supply double this value.

These two characteristics of gold can also be found in bitcoin. In other words, the resemblance of Bitcoin to gold is much greater than the resemblance of today’s common currencies to this precious metal.

Maximum number of bitcoins that can be available and in circulation, 21 million Is a unit. Lost bitcoin units will never be replaced. Also, unlike paper money, which governments are free to print at any time, no one on the Bitcoin network has the right to decide to create more bitcoins; This is because the limit for the total number of bitcoins is embedded in the code of this digital currency and its underlying protocols.

2. Bitcoin prices fluctuate sharply

7 Common Concerns About Bitcoin

Yes, there is! Currently, volatility is an accepted feature in the Bitcoin network and other digital currencies.

Investing in a bitcoin network is not for the faint of heart, and if you are also worried about losing the money you are investing in, you better not get into it!

Most likely, over time, and especially as bitcoin matures, the volatility of this digital currency will decrease. Currently, large institutions such asSquare، PayPal And Microstrategy Start using bitcoin as Payment toolOr have invested in it themselves.

 This indicates that Bitcoin is being taken more seriously and is helping to ease the price fluctuations of this digital currency. 

Expressing the desire of the greats in the field of investment, includingBill Miller Bill Miller and Stanley Druckenmiller invest in bitcoin and digital currencies, and big changes are imminent.

Although better times can shed light on this, consider volatility as a constant feature of digital currencies right now. Users of digital currencies must accept that investing in this field is like an exciting journey that will have its ups and downs.

3. Bitcoin network power consumption is staggering and harmful to the environment

8 Common Concerns About Bitcoin and Their Answers

In the bitcoin network, much of the energy needed to maintain the transaction ledger and extract new units is used by the nodes.

Estimates show that the energy required for the Bitcoin network is equal to the annual energy required for the whole of Switzerland; Statistics that can definitely be worrying.

In response to this concern, I intend to calculate the energy used by financial institutions and banks that currently build the money base with their offices, data centers, and server collections. Of course, this comparison is largely academic and not unique.

To get a better idea of ​​bitcoin energy consumption, we can refer to the report that Ross Stevenes, CEO of Stone Ridge Asset Management, presented to its shareholders in 2020.

 Studying this report provides us with useful information about bitcoin.

In the report, Stevens explains that the bitcoin and blockchain infrastructure technology requires less energy than traditional systems that support routine banking, and Better performanceOffers. In addition, Stevens believes that in the long run, new bitcoin nodes can be deployed in areas that use clean and renewable energy sources, such as hydropower generated by waterfalls and rivers. Stevens writes in his report:

Before Bitcoin, the problem with energy was not its scarcity, but our ability to steer it into geographically disadvantaged and more demanding locations. Before Bitcoin, energy was only found in areas where humans lived. In contrast, the energy of bitcoin mining solves a different problem. Using wireless and satellite internet connections, bitcoin mining can be done anywhere.

The implication of all these descriptions is that bitcoin mining nodes can be placed in the future in areas where green energy is generated easily and without the need to direct it to residential areas. 

Bitcoin energy consumption can gradually reduce the pressure on energy sources and reduce the production of environmental pollutants from non-renewable energy sources.

4. The legality of bitcoin is a concern

8 Common Concerns About Bitcoin and Responses to It

Banks, insurance companies and investment service providers in most countries of the world, including the UK, are under government supervision and guarantee; Provided that their performance is in accordance with the criteria set by the legislature in this area.

According to LawIn most countries, if a bank goes bankrupt or your institution is deceived or defrauded, the government guarantees your refund (at least up to a certain limit).

However, digital currencies are beyond the control of governments and there is no legislation or exclusive ownership of them. In fact, the reason why these currencies have been able to function as a system, without disruption and with great care, is the fact that no central institution manages them.

For this reason, I doubt the government wants to support digital asset investors.

 In contrast, governments often seek to control and leverage these assets.

However, reputable companies such as the digital currency exchange Quinn Base prefer to officially register their company instead of circumventing the law.

 I also suggest that you go for well-known and reputable letters and avoid companies and exchange offices that offer incredible and special discounts and conditions.  

People lose their money when they deal with fraudulent and fraudulent companies without investigation. Carefully review the background and purpose of the company and protect your assets. 

Do not forget that in the world of digital currencies, the responsibility and consequences of your transactions are on your own!

5. Digital assets are easily lost or stolen

8 Common Concerns About Bitcoin and Responses to It

There is a common misconception that hackers target digital currencies simply because they are online. I have been working in the field of bank IT security for more than 9 years and I can guarantee that criminals are just as much looking for digital currencies as they are for stealing “normal” money from legal banks.

In fact, the main danger that threatens digital assets is that they are not monitored by any legal authority (see previous section). 

If your Bitcoin assets are stolen from an online digital currency exchange, it is likely to be out of your reach forever; Because there is no legal authority to recover your assets and you can not claim damages from the insurance.

However, experience has shown that people lose their offline digital assets just as much. 

The world of digital currencies has seen many examples of investors buying bitcoins, carefully storing them in their offline hardware and encrypted wallets, and then inadvertently losing, discarding, or forgetting their hardware wallets. Such cases are great misfortunes; But the good news is that they can often be prevented. 

Also, keep in mind that many people’s money and valuables are stolen every day, and traditional assets can be lost or stolen.  

Like any other valuable thing, you are responsible for protecting what is valuable to you, and Bitcoin is no exception.

6. It’s too late to invest in bitcoin

8 Common Concerns About Bitcoin and Responses to It

By 2021, Bitcoin had set astonishing records and to date (April 25, 1400) has crossed the $ 60,000 barrier. This has led many to think that they have arrived at this big party too late and can not enjoy it.

In 2017, the price of Bitcoin reached a record $ 20,000 before falling below $ 3,000. In fact, Bitcoin’s past performance could indicate the possibility of another Bitcoin crash. Although there is no guarantee that Bitcoin will fall or not fall sharply (as it did in the past), my usual pessimism always makes me prepare for the worst possible situation.

If the price goes down, I will probably seize the opportunity to buy more at a lower price. History shows that there is a possibility of regrowth after a fall.

You can learn from Amazon’s stock experience as to whether or not you missed out on earning money by investing in bitcoin.

Every ordinary person has been tempted at least once in their life to invest a small amount in Amazon stock; Because this company has been growing steadily and many of us are constantly buying from it. 

Amazon stock prices have seen steady growth over the past few years, rising from $ 50 at the end of 2008 to more than $ 3,200 at the end of 2020.

In other words, a potential investor could convince himself for more than 12 years that it was too late to enter and could no longer make a profit from investing in Amazon stocks.

 For these people, the result of this thinking was nothing but 12 years of regret for not buying and investing in Amazon stocks.

Many well-known financial institutions now consider bitcoin to be a good thing in the long run, and they believe that investing in bitcoin can still be profitable. 

The JP Morgan Chase estimates the price of each bitcoin could reach $ 146,000, and Citigroup Bank estimates the target price of bitcoin at $ 300,000.

 There are other, more bizarre predictions that put the price of each bitcoin at up to $ 1 million; Which seems to be based more on hope and optimism than on a scientific basis.

Bitcoin as an investment asset is still in its infancy, and therefore, its volatile cycles will continue for the time being.  

If you have the courage to enter these volatile cycles and want to contribute to the potential future profit of this digital currency (whatever it is), you should know that there is still investment opportunity. The only thing you need to pay attention to is accepting the possibility of loss and strengthening your coping skills.

Keep in mind that for now, the most important principle in investing in digital currencies is to invest only money that you can afford to lose.

7. Bitcoin is just a way of extortion and money laundering by criminals

8 Common Concerns About Bitcoin and Responses to It

Some basic uses of Bitcoin, its application in Dark Web (dark web) and as Anonymous Currency Was used for drug trafficking and arms smuggling.

Also, many of us may have emails Phishing(phishing) or spam that states that our computer is compromised and if you do not pay the requested amount in the form of bitcoin, the information on our computer will be misused. 

The reason these people use bitcoin is because it is untraceable, and this makes many people think that bitcoin is only suitable for criminal purposes.

Although such scams are often based on opportunistic social engineering, these are actually the first encounters many people have with bitcoin, which makes the digital currency a tool for delinquency.

The anonymity of bitcoin certainly seems desirable for such activities, but my argument is that traditional paper money and electronic money transfers have been (and continue to be) used to extort, extort, and intimidate people alike. will be).

For example, most of us have probably dealt with sellers who offer special discounts on “cash” payments to avoid the burden of declaring their income and paying taxes. So cash also has its problems and troubles!

Although Bitcoin may be attractive to criminals, it cannot be said that the only use of this digital currency is to commit crimes. In fact, it is not possible to claim that everyone who uses Bitcoin is guilty, or that this digital currency only attracts the attention of fraudsters.

8. Bitcoin cannot be a real currency

8 Common Concerns About Bitcoin and Responses to It
The belief that bitcoin is not really a currency is based on two reasons.

First, because compared to other currencies, Bitcoin priceFrequently and steadily increasing and decreasing, using this digital currency to buy goods does not make sense. 

The amount of bitcoins you pay for a pizza today may be enough to buy a hundred pizzas tomorrow. So far, this argument is correct, and at present, Bitcoin can no longer compete with the dollar, yen or pound as an online currency for everyday payments.

Although the price of bitcoin is still relatively volatile, it may decrease over time and can be used as a stable currency. 

Regardless of this, it should be noted that bitcoin can still be used to purchase goods and services and can be used through traditional channels such as PayPal.

The second reason that calls into question the status and capability of Bitcoin as a currency is the energy and time it takes to process its transactions. 

Given the amount of energy and time required to complete transaction processing, Bitcoin can never compete with online channels such as Visa, which claim to process 150 million transactions per day. 

Although this view is somewhat correct and plausible, the truth is that the two payment methods are quite different and cannot be compared in this way.  

Certainly the number of bitcoin transactions is currently lower than through channels such as Visa (about 400,000 transactions per day in early 2021); 

However, with the acceptance of bitcoin by platforms such as PayPal and Square, the volume of these transactions is gradually increasing.

The main difference is that Visa and MasterCard do not fully process payments at the stage when the transaction is done online. In contrast, in these systems, the final acceptance and transfer of assets between different entities usually takes several days.

But after paying the bitcoin, the change of ownership of the amount sent is registered in the blockchain, and the majority of the network nodes agree to do so after validating the requested transaction. The extra time spent completing this process represents a complete transfer of value from one side to the other.

Although this method of transaction processing takes more time, it is more comprehensive and by permanently locking the transaction information in the Chinese blockchain and in multiple notebooks, it makes this transaction remain irrevocable and definitive forever.

The technical details of this issue are complex and I have not yet fully understood them; But I hope the general framework of the issue is clear.

Future technological advances could speed up bitcoin transactions; But before Bitcoin can be used more widely, its price may need to be stabilized. 

Until then, I would rather consider bitcoin as an asset for investing or storing value than a currency for everyday payments. In other words, my strategy is to buy and maintain bitcoin for a long time; Work in the bitcoin community under the titleHoodle (HODL) is mentioned.


As I said at the beginning, my goal is not to encourage you to invest in Bitcoin, because it will not be suitable for everyone. But sometimes a careful examination of issues that contradict our views can help measure our understanding of those issues and the logic we use in dealing with them.

If you are still unsure whether Bitcoin is right for you, I recommend that you continue to study and research Bitcoin, and if you are still in doubt, it might be a little like me Fund Enter this space and see if this investment will go as you expect.