The blockchain technology has seen a significant rise in popularity and development. It allows anyone with internet access to handle various transactions and other digital interactions, which are all fast, secure, and efficient.
However, while the technology surrounding blockchain is advancing and has the potential to become even more so, myths have naturally started to appear and paint a false picture of this technology. Today, we are going to discuss some of these myths and share a few life hacks for new crypto and blockchain investors. Let’s begin.
Breaking blockchain myths
1) The blockchain is 100% secure and unhackable
Let’s start off by saying that nothing — no computer system, technology, or network — is unhackable. While blockchain is much safer than various other technologies, it is not invincible. It would require a hacking attack of colossal proportions to break one, but it is still possible, and it is NOT hacker-proof.
2) Blockchain only works in the financial industry
Blockchain is inextricably linked with Bitcoin and while it is true that the first use cases of this technology have been finance-oriented, that was a decade ago. Since then, this technology has been developed and the advances have found their way into almost every industry. It can be deployed in healthcare and real estate, supply chain and identity guardianship, with new use cases emerging each month.
3) Smart contracts will replace the legal system
Smart contracts are a huge part of the blockchain industry and, while they have become one of the main methods of deal-making on the blockchain, it would be false to say that they can be a substitute to written laws. Smart contracts do not have legal relevance in the real world by default and, to get one, a regular legal contract between the blockchain and deal participants still needs to be signed.
4) Blockchain is free
Some people mistakenly start seeing blockchain technology as completely free, or at least cost-effective due to the low costs of transactions and its open source development model. This is only partially true since many do not take into consideration the extreme amounts of computing power that are often necessary to operate each block on the blockchain. Computing power and electricity are not free, so keep that in mind.
5) Blockchain will change the world economy
There is a belief by some crypto enthusiasts and supporters that blockchain can change the global economy by bringing an encrypted and trusted currency system. In reality, the blockchain network is as big as any financial network right now, perhaps the same in scale as the NASDAQ network. This myth may come to fruition only if crypto adoption can grow so much that they will completely replace fiat currencies.
Blockchain investment life hacks
Now that the myths are behind us, here are some short hints on how to go about investing in blockchains and cryptos.
– Leave the altcoins for experienced investors — If you are a beginner in crypto investing, it would probably be smart to play it safe until you learn your way around the market. Stay within the top 20 altcoins, and don’t take risks by betting everything on the underdog. That is the easiest way to lose all you have.
– Conduct deep analysis — When choosing a coin to invest in, you must go beyond its price. The price is only a face of the coin, and it cannot show you its future. Analyze its whitepaper, goals, team, community, and every other aspect that comes with it. That way, you will know what you are investing in, and what to expect.
– Forget about mining — Crypto mining these days is not what it used to be, and if you try to go down that road, you will have huge expenses and likely nothing to cover them with. Mining is now done by huge mining pools, and joining one is the only way to make a profit today.