Bitcoin was initially an underground affair used by cypherpunks, computer scientists, and libertarians. Its fame grew during the global financial uncertainty of the early 2009s-2010s as more people understood its potential.
Years later, on January 19, 2025, Bitcoin reached an all-time high of $109,026.02. It has since gained broader legitimacy, with countries like El Salvador recognizing it as legal tender, and even seasoned Wall Street traders treating it as a serious asset. If you’ve ever believed that Bitcoin is only used by criminals or has no real backing, this article is for you.
10 Biggest Bitcoin Myths Busted
You’ve likely heard that drug dealers mainly use Bitcoin, or that it’s “bad for the environment” or that it is a bubble that’s about to pop. In this section, you’ll get exposed to the truth behind 10 popular myths about Bitcoin.
Myth 1: Bitcoin Is Completely Anonymous
Courtesy: Pixabay
One commonly held assumption about Bitcoin is its anonymity, and this has contributed to its circulation in both legal and illegitimate markets. However, research shows that Bitcoin’s privacy model is pseudonymous rather than anonymous.
According to the Financial Action Task Force (FATF) “Travel Rule,” more than 40 countries obtain and transmit information on Bitcoin transactions exceeding $3000. Hence, both small- and large-scale anonymous Bitcoin transactions are practically impossible.
How Transactions Are Traceable on the Blockchain
The blockchain on which Bitcoin operates is public and unalterable, meaning every transaction is publicly visible and open to audit. When a user completes a transaction on Bitcoin, they will do so with a cryptographic address (i.e., `bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh`), which serves only as a pseudonym.
Bitcoin addresses do not have personally identifiable information (PII), and they are anonymous in reality. In addition, IP and metadata leaks, transaction graph analysis, and the exchange KYC compliance requirements all contribute to de-anonymizing Bitcoin.
A real-life example is the 2020 Twitter hack, where high-profile accounts were allegedly breached to facilitate a Bitcoin scam. The scam was quickly tackled by investigators through timing analysis of deceptive transactions.
Myth 2: Bitcoin Has No Real Value
Another recurring critique of Bitcoin is that it has no intrinsic value and is essentially a speculative asset. When it comes to determining value, monetary assets are different from commodities. Commodities have value because of their use and consumption; monetary assets have value because they are durable, portable, and scarce.
Bitcoin is the first digital-native asset that possesses these basic monetary properties. Unlike prior evolving forms of money, the value proposition of Bitcoin does not arise from a physical use; rather, it arises from its digital convenience, secure decentralized security model, and increased global interest and acceptance.
While gold’s market value of $15 trillion is still substantially larger than Bitcoin’s value, Bitcoin is predicted to take market share away from gold, according to Zach Pandl, a Goldman Sachs analyst.
As gold annual production will grow by about 2.5% a year, Bitcoin’s inflation rate fell to 1.8% after the 2024 halving and will fall to 0.85% after the 2028 BTC halving. Large corporations are also predicted to hold about $330 billion worth of Bitcoin assets by 2029.
Myth 3: Bitcoin Is Only Used for Illegal Activities
While Bitcoin’s pseudonymous functionality facilitated some initial illicit use in its early years, its ecosystem has developed into a regulated financial infrastructure where legitimate transactions predominate. Chainalysis’ 2022 Crypto Crime Report notes that illegal activity now was about 0.15% of Bitcoin’s annual transaction volume in 2021.
The 0.15% illicit usage rate not only refutes critics’ claims, it also excels when compared with the contrasting value in traditional financial systems. For instance, the UN estimates between 2% and 5% of global GDP, or about $800 billion to $2 trillion, each year is illicit fiat transactions.
To prevent legitimate transactions, many countries ensure all cryptocurrency exchanges use KYC & AML-compliant systems as imposed by the Financial Action Task Force (FATF). These compliance frameworks function as systemic barriers to illicit financial flows.
Myth 4: Bitcoin Is Bad for the Environment
The environmental implications of Bitcoin mining are yet another misconstrued part of cryptocurrency, with many often pointing out energy consumption figures. While Bitcoin’s proof-of-work mechanism requires a substantial amount of electricity, the idea that Bitcoin is “bad for the environment” does not take into account recent developments.
Many Bitcoin miners have transitioned to renewable energy on massive scales, further increasing their mining hardware efficiencies. When compared to older financial and commodity systems, Bitcoin has a much less significant environmental impact.
The table below compares Bitcoin mining’s environmental impact to that of various similar commodities:
| Sector | Metric | Value |
| Gold Mining | Annual Energy Consumption | 475 TWh |
| Gold Mining | Toxic Mercury Waste | 4,500+ tons |
| Gold Mining | Land Usage | 180,000 acres |
| Traditional Banking | Annual Energy Consumption | 650 TWh |
| Traditional Banking | CO2 Emissions from Currency Production | 8 million tons CO2 |
| Global Data Infrastructure | Annual Energy Consumption (Video Streaming) | 350 TWh |
| Global Data Infrastructure | Projected AI Energy Use by 2026 | 800 TWh |
Bitcoin mining has become one of the most sustainable industries in the energy sector. According to the Bitcoin Mining Council’s 2022 report, 59.5% of Bitcoin’s global hash rate now runs on renewable energy.
This shift was driven by miners’ economic incentives to seek the cheapest power sources, which increasingly come from excess renewable energy.
Myth 5: Bitcoin Is Just a Bubble
Courtesy: Pixabay
Classifying Bitcoin as a speculative bubble negates its ability to withstand volatility. The most relevant argument against Bitcoin as a bubble is that real bubbles in finance tend to share three things in common that are not found in Bitcoin:
- No Utility
Real bubbles like Beanie Babies or Pets.com stock do not have utility, but Bitcoin does because it is a censorship-resistant settlement network and an institutional-grade collateral.
- No Meaningful Recovery from Collapse
Bubbles, no matter how long the life cycle, do not recover to the previous valuation, e.g., the Nasdaq took 15 years to recover from its 2000 high. Bitcoin has survived 5 market collapses and systematically increased to an all-time high after each cycle.
- No Institutional Adoption
Bubbles only generate retail speculation, but institutional Bitcoin adoption is projected to soar in late 2025, according to Binance.
Myth 6: Bitcoin Is Too Volatile to Be Useful
Bitcoin’s price volatility is often viewed as a defect; however, it is important to consider this feature in the context of the natural life cycle of emerging asset classes. Volatility is common in emerging markets in price discovery mode and occurs when adoption is rapidly increasing.
Other asset classes, like Amazon stock, once lost over 90% of their value during the dot-com crash of 2000, yet they are some of the most valuable companies in the world today. Similarly, when Google went public in 2004, shares were priced at $85; we now see Alphabet traded well over $120+ (adjusted for splits).
Myth 7: You Need to Buy a Whole Bitcoin
Courtesy: Pixabay
Many people still believe they have to buy a whole Bitcoin (over $103168 as of May 2025), without knowing Bitcoin can be split into 100,000,000 pieces called satoshis (sats).
For approximately $1.03, you can own 1,000 sats, so virtually anyone can access and invest in Bitcoin. The popularity of fractional investing allows people of all income levels to buy Bitcoin.
More than 40 million Bitcoin addresses hold less than 0.01 BTC, confirming the presence of micro-investing. There are now platforms in different parts of the world, like UEEx, that allow users to buy small fractions of BTC. People can also use Bitcoin ATMs and Lightning Wallets that enable them to send BTC amounts while collecting or purchasing satoshis.
Myth 8: Bitcoin Transactions Are Instant
Bitcoin transactions do not settle immediately in the same way cash or digital payment apps do. While there is nothing instant about Bitcoin settlements, they execute as intended by its creator, Satoshi Nakamoto. The first process of a Bitcoin transaction to the network is instant, but the finality of a Bitcoin transaction takes 6 confirmations.
This delay is a security feature, not a limitation for either party.
As blockchain technology advanced, the Lightning Network became a solution for instant micropayments in Bitcoin. As of 2025, the network processed over 75 million transactions daily at average fees of under $0.01.
Myth 9: Bitcoin Is Not Secure
Courtesy: Pixabay
By far, the most secure computing network on the planet is Bitcoin’s blockchain itself. It is secured by 796 exahashes per second of total mining power as of December 2024. That level of hash power is roughly 80 times more than what the top 500 supercomputers in the world can output.
Since the launch of Bitcoin in 2009, the protocol has experienced 99.98% uptime and no successful 51% attacks.
While the blockchain itself is secure, most Bitcoin security incidents are a result of human error or the use of an insecure third-party platform. For instance, when centralized exchanges like Mt. Gox (2014) or FTX (2022) disappeared, it was due to human error, mismanagement, and fraudulent practices.
By utilizing open-source air-gapped signing devices, verifying receive addresses via more than one channel, and ensuring that you have a multi-signature setup for institutional holdings, you can protect your Bitcoin.
Myth 10: Governments Will Ban Bitcoin
The idea that governments could succeed in banning Bitcoin has been conclusively disproved by the increasing growth of Bitcoin. Regulators have always been cautious about Bitcoin’s potential; however, the operations of Bitcoin, by their very nature, simply cannot be banned without being economically unproductive and technically impossible.
Even if larger countries attempted to collaborate to block Bitcoin traffic, machine networks and satellite feeds, like Blockstream’s satellite constellation, will disseminate transactions and blocks regardless.
Interestingly, government bans in certain countries improved financial activities in decentralized exchanges (DEXs) and P2P platforms. After Nigeria imposed restrictions in 2021, Paxful recorded about $760m in transactions from Nigeria.
Conclusion
In this article, we have deconstructed ten false beliefs regarding Bitcoin that persist, despite substantial evidence to the contrary. These truths are essential in today’s economy as Bitcoin has progressed from an internet novelty to a macroeconomic hedge.
UEEx invites you to start your first Bitcoin experience, whether it is through a $5 Lightning transaction or exploring other similar decentralized options
FAQs
No. Bitcoin is made on a public blockchain, so every transaction is permanently recorded and can be traced.
Effectively, no. They have tried, and it has always failed, for a range of the following reasons:It runs on a decentralized network of over 100,000 nodes around the world.Not only does peer-to-peer trading flourish under bans, but in Nigeria peer-to-peer trading saw over a 400% increase in volume after they “banned” bitcoin.More than 7 countries hold bitcoin on their balance sheets as reserve assets, so any ban becomes politically ridiculous.
Illegal transactions in 2025 equated to only 0.15% of Bitcoin activity, as the main purposes for Bitcoin include:Institutional investment ($150B invested in ETFs)Cross-border remittances (avg. $12B per month using the Lightning Network)Treasury reserves (53% of Fortune 500 companies hold BTC)
The blockchain has never been hacked; rather, the exchange services are hacked. These security defects often arise because of phishing attacks and user mistakes in not securing their seed phrase or backing it up.
You can buy Bitcoin by following any of these procedures:Buy small amounts of Bitcoin through regulated exchanges.Transfer to a hardware wallet for long-term holding.Try out a Lightning wallet to use for payments.Sharing your private key or seed phrase is a no-no.
