Bitcoin Forum

Here are some common misconceptions around Bitcoin I've encountered while discussing on the forum.

Misconception #1. A Bitcoin wallet holds your funds. Wrong.

Bitcoin wallets control the private keys necessary to access and transfer your funds. Your coins are never in your wallet. You never have them in your actual possession. The funds you see in your wallet are just a convenient way to display them to you. They are always out there, in the public ledger.

Misconception #2. We have to trust Satoshi Nakamoto with our money now. Wrong.

Somehow there is a belief that we have to trust someone with our money. Since we don't have to trust the government or the banks, the question is who should we trust now. Bitcoin was designed to be a trustless system from the very beginning. You don't have to trust anyone. The system takes care of itself automatically.

Misconception #3. The government can decide to regulate the Bitcoin's network. Wrong.

No government can ever regulate the network. It can decide to regulate the people using it, for example, via taxation, preventing access to exchanges, etc. But the network is designed to be decentralized and censorship resistant.

Misconception #4. There are safe online wallets I can trust my private key with. Wrong.

You can never trust any website with your private key. Even the most secure online places eventually could get hacked. It's the nature of the game. We are dealing with computer codes, and by their very nature, they are never completely free of bugs. And these bugs get exploited. Therefore, keep your private key safe. Only you and no one else but you can access your private key, and it should preferably be kept in a cold storage system. If you decide to trust a website wallet, do that only temporarily and only to move small amounts of coins.

Misconception #5. I can use virtual machine to install my wallet on for better security. Wrong.

It's the other way around. You protect your main operating system by isolating questionable codes in a virtual machine. 

Misconception #6. People are silly to put their faith in digital money. It's just code and nothing else. Wrong.

The same can be said for fiat money. In essence, it's just paper and nothing else. It receives value in the process of mutual agreement among people using it. Inherently, all other forms of money are the same, including gold. They are valuable because we agree they are valuable. So digital money is another form of money that has value. It is a logical extension of money for the digital age. And it is here to stay.

Certainly there are many more misconceptions of similar type. Do you have some that can be added to this list?

Great great list. +1 Merit for you.

Misconception #7. Bitcoin is NOT a moneymaking scheme/ investment scheme

Please please don't advertise bitcoin as a moneymaking scheme or an investment. I've seen countless posts here on bitcointalk whereas the new member says something along the lines of "my friend told me I can earn bitcoin here, can anyone tell me how to earn bitcoin?" or "someone said bitcoin will make me rich, how to earn bitcoin?".    Sure, you can earn bitcoin online, just as you can earn fiat money online. But don't advertise bitcoin as such. Bitcoin's technology is very often overlooked and ignored by people.

Misconception #8. Bitcoin is free. Wrong

Bitcoin is not free. As other currencies bitcoin is " Crypto Currency " but it is not free. Yes you can get it by many means some famous are (faucets, mining, etc). But its not free you are investing your money and time on Machine , internet and work which you provides to get.

I saw this picture recently.
Cost to mine 1 bitcoin is pretty high around the world, with very few exceptions.

https://i.imgur.com/ndbR6Yu.jpg

Really good information. Indeed, many of the newbies here I think just want to become rich by the use of Bitcoin. And that's not so simple, bitcoin can't be seen just as a way to earn some dollars, for this is a technology fully dedicated to many different things.

The pieces of advice you share are perfect for a newbie. I'm truly glad of finally discover some useful stuff here in the Begginers and Help board, instead of this "beggers" plague.

Well technically, there are still plenty of scenarios where you will have to trust third parties. Bitcoin users use exchanges, software wallets, hardware wallets, among other things, so you're trusting your money with them in essence. The trustless label refers to the peer-to-peer nature of Bitcoin not needing a third party payment processor and a central bank, etc. The system takes care of itself, but you still need to take care of yourself.

I just felt the need to clarify that because some newbie may read this and be under the false impression of absolute safety regardless of the choice of software and services. Great job otherwise!

Misconception #9. Transitions fees depend on the amount of Bitcoin.

Unlike banks, the fees do not depend on how much are sent.
You can send 100 Bitcoin and 0.1 bitcoin with the same fees, it does not depend on the amount but the number of Inputs/outputs.
With the recent low fees, large transaction fees may be less than small.

Misconception #10. it was for illicit activities.
Although this concept appeared with the beginning of the Bitcoin "because people did not know it", it still resonates to this day.

Thanks for that. Totally agree with your clarifications and improvements of point #2. The ways newbies tend to interpret things is really astonishing. And when people have no technical background at all, it's even harder. They can easily be confused and get all sorts of crazy ideas.

Misconception #11. Bitcointalk is a money making area where we can spam with silly answers and earn shit tons of dollars. Wrong.

As I dig into this forum a lot nowadays, I understand that this was one of the finest forums for the development and other technical stuffs unless those fu**ing shitposters started making some money by spamming this wonderful place. Lots of developments happened in this forum and lots of crypto terms like HODL, POS were introduced in this.

* It was a place where an idea flourished for Vitalik and other people to start their own cryptocurrency

* It was a place where the first real world transaction for btc took place with Laszlo buying pizzas

And a lot more. I am wondering when would those old days come back.  :-\

Though this is not a misconception about BTC, it is a common misconception by a newbie who joins here.

Hmmmm everyone is with you, it alright to share your knowledge in a thread with a thousands of replies compare to individual who make a very commonly question in a thread but some old members are still answering it... dont know the reasons behind that.

For beginners, there is always some misconception. To get proper idea always be involved in various crypto groups and clear all your doubts.