Popular myths about Bitcoin

[deisik]

Okay that's true, but Bitcoin will have 21 million units in circulation by 2150. 21 million coins will need to service the financial needs of the whole world by that time. How can we attribute the global net worth of everything on Earth to 21 million units? Because Bitcoin will be a truly global currency if this ever happens - to effectively supersede fiat. I think we will need a lot more subunits past the 8 one to even accommodate such big numbers. And 1 satoshi by 2150 would cost astronomical sums compared to now. And what if some very wealthy individuals just buy out massive amounts of units and put them out of the market - let's say they burn them. The 21 million units will be even less. That will lead to massive inflation and deflation every time a portion is added or removed form the global pool of 21 million units. This will lead to a cluster fuck of problems because unlike traditional fiat we can't print out additional coins to accommodate the market

That is another question

Personally, I don't think that fiat will go away. More likely, Bitcoin will exist along with government money. In any case, there are a lot of other cryptocurrencies out there that will readily fill the void if Bitcoin fails to fully substitute fiat money, provided the latter should disappear in the first place, of course. But, as I said, this is highly unlikely to happen

[Pursuer]

the worst thing that I have heard was about mining bitcoin and it was in the early days that I did not know what bitcoin is and how it works. what I heard was that someone said "mining bitcoin is solving an equation" which was really confusing to me because I kept thinking about how do these equations work!

[Carlton Banks]

the worst thing that I have heard was about mining bitcoin and it was in the early days that I did not know what bitcoin is and how it works. what I heard was that someone said "mining bitcoin is solving an equation" which was really confusing to me because I kept thinking about how do these equations work!

A better analogy is that mining is like a dice game, where the number of di gets increased every time someone new wants to start playing. It ends up where the person who wins the most games is the one who invents the best machine for throwing as many dice simultaneously as quickly as possible.

[MONKEYJUNK]

And we should compare a exchange hack to a bank robbery.
Media say "bitcoin hack", "bitcoin unsafe" like robbing a bank make the USD unsafe...

I think that's a good myth about safety.

[seven2smoke]

Bitcoin Mining Wastes Electricity
A recent report found that Bitcoin’s network hashrate could consume as much power as Denmark by 2020. Other reporters dispute this characterization, pointing out that Bitcoin uses the same electricity as the yearly consumption of 674.5 average American homes, two Amtrak locomotives or a California hydroelectric plant. Do these things waste electricity? It depends on your point of view. The reality is that the use of computing power serves a purpose in Bitcoin, which is securing all of the transactions on the network. If you don’t think Bitcoin is valuable, maybe that’s a waste. If you don’t think fiat currencies are valuable, maybe keeping the lights on at the Federal Reserve is a waste.

Electricity-intensive Bitcoin mining is essentially a way to prove that someone has expended resources in hopes of getting a block reward and transaction fees in return for their efforts. Proof-of-work, as it’s called, acts as a prevention mechanism against Sybil attacks (forged identities) on the Bitcoin network. Waste? You decide.

[jondeen707]

3. Bitcoin is not real money, because only banks or governments can run money systems

This myth suggests that money has to be "official" in some way, but history tells us otherwise. Money existed before governments or banks, and has continued to exist when governments or banks dissolve. Barter and trade naturally end up in one commodity or another being used as the most common medium of exchange. Money emerges from marketplace activity over time therefore, and communities will also change the good that they use for money depending on practical or political circumstances.

I beg to disagree with u, though I understand the spirit of your post. By Bitcoin is not real money, it means Bitcoin is not a legal tender. And it is true that Bitcoin is not a legal tender anywhere on earth, though it does not matter much.

I guess nowhere on Earth foreign currencies are considered as a legal tender domestically, but this doesn't turn them into fake currencies of sorts. I know that Bitcoin is not a legal tender anywhere across the world and most likely won't become one for the next 50 years (though who knows)...

But this alone is apparently not enough to claim that Bitcoin is not real money, even purely on formal basis

Very few countries officially allow the local use of other fiat currencies alongside the ones they issue. You would not find any developed countries in that list for sure. What's peculiar about Bitcoin is that even the most protective governments tend to at least give bitcoin some leeway as they want to fully explore it before committing to any official stance on it. Surely, it may be the case as bitcoin is still too small to make a difference globally and that can change should they start viewing it as a threat.

I'm also happy to see that the overall perception of bitcoin among the world governments has been positive and that of something that's here to stay. That's a good thing.

[Snorek]

Bitcoin Mining Wastes Electricity
A recent report found that Bitcoin’s network hashrate could consume as much power as Denmark by 2020. Other reporters dispute this characterization, pointing out that Bitcoin uses the same electricity as the yearly consumption of 674.5 average American homes, two Amtrak locomotives or a California hydroelectric plant. Do these things waste electricity? It depends on your point of view. The reality is that the use of computing power serves a purpose in Bitcoin, which is securing all of the transactions on the network. If you don’t think Bitcoin is valuable, maybe that’s a waste. If you don’t think fiat currencies are valuable, maybe keeping the lights on at the Federal Reserve is a waste.

Electricity-intensive Bitcoin mining is essentially a way to prove that someone has expended resources in hopes of getting a block reward and transaction fees in return for their efforts. Proof-of-work, as it’s called, acts as a prevention mechanism against Sybil attacks (forged identities) on the Bitcoin network. Waste? You decide.

You can compare consumption of energy of bitcoin network to process of printing FIAT banknotes/minting coins.
Do you think that printing new money is cheap, effortless (compared to Bitcoin) and requires no/less energy or manpower?
Quite the contrary. Additional argument: mining of precious metals - this process is more destructive/harmful to our environment than mining bitcoin will ever be.

[Yakamoto]

Bitcoin Mining Wastes Electricity
A recent report found that Bitcoin’s network hashrate could consume as much power as Denmark by 2020. Other reporters dispute this characterization, pointing out that Bitcoin uses the same electricity as the yearly consumption of 674.5 average American homes, two Amtrak locomotives or a California hydroelectric plant. Do these things waste electricity? It depends on your point of view. The reality is that the use of computing power serves a purpose in Bitcoin, which is securing all of the transactions on the network. If you don’t think Bitcoin is valuable, maybe that’s a waste. If you don’t think fiat currencies are valuable, maybe keeping the lights on at the Federal Reserve is a waste.

Electricity-intensive Bitcoin mining is essentially a way to prove that someone has expended resources in hopes of getting a block reward and transaction fees in return for their efforts. Proof-of-work, as it’s called, acts as a prevention mechanism against Sybil attacks (forged identities) on the Bitcoin network. Waste? You decide.

You can compare consumption of energy of bitcoin network to process of printing FIAT banknotes/minting coins.
Do you think that printing new money is cheap, effortless (compared to Bitcoin) and requires no/less energy or manpower?
Quite the contrary. Additional argument: mining of precious metals - this process is more destructive/harmful to our environment than mining bitcoin will ever be.

It's actually kind of entertaining when some of these things are brought up, if anything it is more entertaining watching users try to perform the mental gymnastics to somehow justify Bitcoin being worse for the environment compared to a majority of other forms of currency manufacturing or generation. I see nothing wrong with the amount of power consumed by Bitcoin.

[funkenstein]

Still no one has answered my question: how would you find out the value of 1 Bitcoin if there were no Bitcoin exchanges?

I'd ask the brewer down the road how many cases of beer he will trade me for ten bitcents.  

Bitcoin is more like a commodity right now than actual, useful money. Bitcoin is like crude oil. People waste energy and resources to gain crude oil for example, that crude oil has a price attached to it depending on the market. The market speculators regulate the price. 1 barrel of crude oil costs $44.65 at present.
Now, I can go to Amazon and shop around bringing my shopping cart to $44.65 with the shipping included. Can I send them 1 barrel of crude oil because it is the same value just because the market says so and it's 'money'? I guess no.

Now we have Bitcoin. What are people doing to get Bitcoin? They sit at home digitally extracting that commodity racking up electricity bills and breaking down expensive electronics in the process trying to extract Bitcoin from the Blockchain. 1 Bitcoin is valued at $708.8. This is what the market thinks 1 Bitcoin is valued at - or the speculators.

Now, I challenge you to delete all bookmarks to any online Bitcoin exchanges, BTC debit cards, Circle, Coinbase all the other fancy-schmancy websites and tell me what 1 BTC is valued at this Christmas based on your calculations.

Because I know that 1 bottle of water or 1 Subway sandwich will be x amount of fiat at the end of the day but there is no way you would know how much that would cost in BTC if BTC weren't pegged to fiat. Or I could pay for my sandwich with x amount of gold, Facebook credits, CS Go skins, World of Tanks points or any other token but this doesn't make it money just because it has a value. Anything can have a value so what? Just because Satoshi said that Bitcoin will be free digital currency for the people worldwide that doesn't mean that everyone will become rich out of the blue. You still have to buy equipment and 'mine' for it in the virtual world like you would mine for ores or extract petrol in the real world. And no, Bitcoin at the moment is not money.

First of all, you have no idea how many rupees you will have to trade me for 1 Subway sandwich in 2018.  Technically you don' t know the price until the deal goes through.  

Second of all, who cares whether you call something money or not?  In the end of the day, you will trade your cases of beer to me for a certain amount of my facebook credits, private bank issued dollars, publicly issued bitcoins, or maple syrup.  It's an exchange.  Commodities which are used exclusively for exchange are called exchange commodities, many refer to them as money.  It doesn't matter, does it.  Perhaps you need to make a legal argument and say it's not money citing some things people wearing wigs and suits said many years ago.  Sure, go for it.    

  

 

[kiklo]

Bitcoin Mining Wastes Electricity
A recent report found that Bitcoin’s network hashrate could consume as much power as Denmark by 2020. Other reporters dispute this characterization, pointing out that Bitcoin uses the same electricity as the yearly consumption of 674.5 average American homes, two Amtrak locomotives or a California hydroelectric plant. Do these things waste electricity? It depends on your point of view. The reality is that the use of computing power serves a purpose in Bitcoin, which is securing all of the transactions on the network. If you don’t think Bitcoin is valuable, maybe that’s a waste. If you don’t think fiat currencies are valuable, maybe keeping the lights on at the Federal Reserve is a waste.

Electricity-intensive Bitcoin mining is essentially a way to prove that someone has expended resources in hopes of getting a block reward and transaction fees in return for their efforts. Proof-of-work, as it’s called, acts as a prevention mechanism against Sybil attacks (forged identities) on the Bitcoin network. Waste? You decide.

You can compare consumption of energy of bitcoin network to process of printing FIAT banknotes/minting coins.
Do you think that printing new money is cheap, effortless (compared to Bitcoin) and requires no/less energy or manpower?
Quite the contrary. Additional argument: mining of precious metals - this process is more destructive/harmful to our environment than mining bitcoin will ever be.

It's actually kind of entertaining when some of these things are brought up, if anything it is more entertaining watching users try to perform the mental gymnastics to somehow justify Bitcoin being worse for the environment compared to a majority of other forms of currency manufacturing or generation. I see nothing wrong with the amount of power consumed by Bitcoin.

Funny,  
the Energy companies supplying the electricity don't feel the same way you do.  

http://www.newsbtc.com/2016/07/21/bitcoin-miners-in-washington-state-to-pay-more-for-electricity/

Bitcoin miners in Chelan County, Washington will now have to shell out more for the electricity following Public Utility District‘s decision to increase energy tariff from next year.

The increased energy rates are not just applicable to Bitcoin mining centers but to other energy intensive operations including regular data centers and server farms. According to reports, the public discussion and negotiations regarding the new electricity rates extended for over 18 months before reaching this point. Bitcoin business owners in the region took part in these negotiations as any increase in the energy costs may significantly affect their profitability. The effects will be further compounded by the recent halving of Bitcoin rewards and stagnant Bitcoin price.

Bitcoin mining farms are classified as High-Density Load consumers under the ‘Schedule 35‘ provided they consume over 250-kilowatt hours of electricity per square foot of operational floor space in a year, with the requirement not exceeding 5 megawatts at any point in time.

However, reports suggest that none of the representatives of the Bitcoin mining operations in the region were present during the voting process. The results of the voting are said to be unanimous in the favor of new increased tariff which will come into effect on January 1, 2017.

Starting next year, High-Density Load operators will have to pay a monthly charge ranging from $130 to $860 per meter along with additional $5.50 per kilowatt and $0.027 per kilowatt hour as monthly demand charges and energy charges respectively. They will also have to make an upfront payment to cover all the costs incurred by the department to distribute power to the facilities.

According to the Public Utility District commissioners, the new rates were introduced after they noticed a sudden surge in demand for electricity. Upon study, it was discovered that the surge was driven by increased Bitcoin mining activity in the county, which was otherwise known for cheaper energy prices compared to other places in the United States.

 

FYI:
Wonder if you will feel the same way , if your electricity rates increases because of Miners.

http://kernelmag.dailydot.com/issue-sections/staff-editorials/11336/how-much-electricity-bitcoin-use/

http://motherboard.vice.com/read/bitcoin-is-unsustainable

According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day.

Reason Proof of Stake will Defeat Proof of Work in the long run.
Proof of Stake is energy efficient, where as Proof of Work is just energy wasteful.

[funkenstein]

FYI:
Wonder if you will feel the same way , if your electricity rates increases because of Miners.

Public coin adoption absolutely will lead to people using energy more efficiently.  Somehow I don' t find that a bad thing.  

Reason Proof of Stake will Defeat Proof of Work in the long run.
Proof of Stake is energy efficient, where as Proof of Work is just energy wasteful.

Personally I'd rather accept coin which provably required energy to generate than one which provably required.. no energy.  We'll see what the market says won' t we  

[kiklo]

Personally I'd rather accept coin which provably required energy to generate than one which provably required.. no energy.  We'll see what the market says won' t we  

And I would rather accept one that does not raise my electric bills.

Agreed, Time & the markets will Decide the Final Winner.  


 

[deisik]

And we should compare a exchange hack to a bank robbery.
Media say "bitcoin hack", "bitcoin unsafe" like robbing a bank make the USD unsafe...

I think that's a good myth about safety.

This looks more like a FUD attempt or sensational news rather than a real myth

Very few countries officially allow the local use of other fiat currencies alongside the ones they issue. You would not find any developed countries in that list for sure. What's peculiar about Bitcoin is that even the most protective governments tend to at least give bitcoin some leeway as they want to fully explore it before committing to any official stance on it. Surely, it may be the case as bitcoin is still too small to make a difference globally and that can change should they start viewing it as a threat

I've seen a lot of users claiming here that the American dollar is universally accepted across the world. I even had to provide a link to the Canada Travel Guide (Canada is closest to the US both geographically and economically, in case someone doesn't know), and it outright says that the US dollars may be accepted only in stores near the US border...
 
That seems to be another big myth, though it is not related to Bitcoin directly

[Catlonid]

About #1 "Bitcoin is not recognized in the world, its use is illegal in most countries"

Actually it's a mess, every country have their own rules and most are just shallow words because it's something new. Let's wait for the future to see what will happen.

I think you are true. Only a few countries which regard bitcoin was illegal. But there is use bitcoin which used for illegal activities, I read on some thread.

[btccashacc]

4. Blockchain.info is the offical wallet of Bitcoins

Many people believe it just because the wallet's name is Blockchain.

About the BTC illegality. Where I live it's not illegal or legal, the law just doesn't know what to say about it. But some banks here block the transaction when you try to convert BTC into local money on exchange and send the money to it, when they distrust about crypto-currencies money.

Lol, i always found this they mentioned that blockchain is official wallet, well if there such an official wallet it must Bitcoin Core which is created by Satoshi Nakamoto honestly i've never heard satoshi declare that Bitcoin Core is official wallet.

About #1 i believe every country in this world using bitcoin either as a payment method or investment tool, however used bitcoin for transaction is illegal here but police won't arrest you if you hold or trade them like stock.

[franky1]

4. Blockchain.info is the offical wallet of Bitcoins

Many people believe it just because the wallet's name is Blockchain.

About the BTC illegality. Where I live it's not illegal or legal, the law just doesn't know what to say about it. But some banks here block the transaction when you try to convert BTC into local money on exchange and send the money to it, when they distrust about crypto-currencies money.

Lol, i always found this they mentioned that blockchain is official wallet, well if there such an official wallet it must Bitcoin Core which is created by Satoshi Nakamoto honestly i've never heard satoshi declare that Bitcoin Core is official wallet.

About #1 i believe every country in this world using bitcoin either as a payment method or investment tool, however used bitcoin for transaction is illegal here but police won't arrest you if you hold or trade them like stock.

bitcoins ethos should be that there is no official wallet. there should always be a diverse choice of wallets to avoid control risks.
yes use terms like popular.. but saying 'official' is a failure of bitcoins ethos

also some notes:
satoshi made bitcoin-qt.
satoshi disappeared in 2010

bitcoin-core was not invented until 2013..
bitcoin core and bitcoin-QT are 2 vastly different codebases. so try not to attribute satoshi to be anything related to core. satoshi had no involvement in core.

also dont attribute the bitcoin-core devs to be highly linked to satoshi.
pieter wuille appeared 2013. gmaxwell appeared 2011.. both long after satoshi disappeared. there was no collaboration..

yes core is the popular choice. but should not be branded the official choice. no one should be an official of bitcoin otherwise the decentralized and diverse nature of bitcoins ethos will be removed.

[deisik]

4. Blockchain.info is the offical wallet of Bitcoins

Many people believe it just because the wallet's name is Blockchain.

About the BTC illegality. Where I live it's not illegal or legal, the law just doesn't know what to say about it. But some banks here block the transaction when you try to convert BTC into local money on exchange and send the money to it, when they distrust about crypto-currencies money.

I am thinking about adding another widespread myth about the Blockchain wallet, namely, that it is the safest wallet between the web-wallets such as Coinbase and Xapo (as far as it can be called that), but I'm still sitting on the fence, so to speak, and haven't yet made up my mind whether this myth is worth adding to the list...

What do guys/gals think?

[franky1]

4. Blockchain.info is the offical wallet of Bitcoins

Many people believe it just because the wallet's name is Blockchain.

About the BTC illegality. Where I live it's not illegal or legal, the law just doesn't know what to say about it. But some banks here block the transaction when you try to convert BTC into local money on exchange and send the money to it, when they distrust about crypto-currencies money.

I am thinking about adding another widespread myth about the Blockchain wallet, namely, that it is the safest wallet between the web-wallets such as Coinbase and Xapo (as far as it can be called that), but I'm still sitting on the fence, so to speak, and haven't yet made up my mind whether this myth is worth adding to the list...

What do guys/gals think?

blockchain.info official web wallet no
blockchain.info popular web wallet yes

[deisik]

It seems that I somehow totally forgot about another very widespread myth regarding Bitcoin usage in everyday life. Just today I've seen a few posts claiming that Bitcoin is completely useless as a means of payment for daily expenses like "rent, groceries and activities". That story might have had some substance just two years ago, but things in the Bitcoin world change very fast nowadays. And the reality now is that most, if not all, self-respecting web wallets (and not only wallets but exchanges too) issue Bitcoin payment cards which make payments with Bitcoin as trivial, simple and fast as with any other such card, be it Visa or MasterCard (the ones I use myself). These cards have been available for over a year now, with BitPlastic being the first such card which appeared as back as in 2013...

But the myth seems to persist and is hard to root out

[Tyrantt]

The most popular obe is among new people "bitcoin will make you rich quickly".