Since blockchain is still a relatively new technology, there are many falsehoods and misconceptions surrounding cryptocurrencies. Let us review some of the most common crypto FUD (Fear, Uncertainty, and Doubt) and separate fact from fiction. The first issue discusses the myth that cryptocurrencies are used primarily by criminals.
Amidst a backdrop of global economic change, the cryptocurrency industry continues to thrive and prove resilient, with 11.5 million people in 70 countries, including Kenya, making payments with Binance Payback.
However, the lack of understanding of this technology has given rise to several false beliefs and misconceptions, causing many people to approach digital assets with unwarranted suspicion and uncertainty. To combat this, we have made it our mission to provide World Wide Web3 education accessible to all and to work to improve understanding of cryptocurrency.
Through these efforts, we aim to debunk common misconceptions and promote greater crypto literacy among Kenyans. Our goal is to clear up the confusion and help improve the general public’s understanding of cryptocurrencies. Having a thorough understanding of the basics and thinking critically is essential, as this will help people better understand and ultimately use cryptocurrencies. Let us bust some crypto myths!
Myth: Cryptocurrencies Are Only Used by Criminals
The use of cryptocurrencies for illegal activities has been a matter of concern since the early days of this new form of digital currency. The public’s perception that cryptocurrencies are inherently linked to criminal activities (such as money laundering, drug trafficking, and cybercrime) can be traced largely to the initial media coverage of cryptocurrencies, specifically the infamous Ruta market. of the silk
Silk Street was an online black market that operated on the dark internet from 2011 to 2013, offering a platform for the anonymous buying and selling of illegal goods and services using cryptocurrency. The market was known for its involvement in drug trafficking, and the association between cryptocurrency and Silk Road’s illicit activities contributed to cryptocurrency’s negative reputation in the mainstream media.
The perceived anonymity and decentralization of cryptocurrencies have raised concerns that they facilitate criminal activity. Many news outlets often choose to focus on high-profile cases of cryptocurrency-related crime, furthering the notion that digital assets are primarily used by those seeking to engage in illegal activities while avoiding detection.
Data Shows that Cryptocurrencies Are Used Mainly by Ordinary People
The reality is that cryptocurrencies are mainly used by ordinary people and exist as a legitimate tool for a variety of everyday transactions. Binance alone has more than 140 million registered users. As with any emerging (or existing) technology, criminals will always use it for nefarious purposes. That being said, illicit activity accounted for just 0.15 percent of crypto transactions in 2021, up from 0.62 percent in 2020, despite the industry’s exponential growth. Money laundering represented 0.05 percent.
And do not just take our word for it. This is data from Chainalysis, an independent blockchain analytics company. Chainalysis data is often used by high-level government agencies to investigate and combat cryptocurrency-related crime.
In the traditional fiat space, between $800 billion and $2 trillion are laundered every year (representing between 2 and 5 percent of global GDP), reports the United Nations Office on Drugs and Crime. (UNODC). Compare that to cryptocurrencies, and the amount is a minuscule .03 percent of that. Criminals do not like cryptocurrencies because the fact that transactions are publicly and permanently recorded allows researchers. The transparent nature of cryptocurrencies makes it easier to identify bad actors.
By Leonardo Pérez
