Looking back at the past two years, it is clear that cryptocurrencies are gaining more popularity and now, more people than ever know about and are involved with cryptocurrencies in some manner.

Still, if you take a look at how many people don't know or care about crypto, you would be quite amazed, especially if you have been deeply involved in this space for quite some time. Though there are no concrete numbers, I am guessing, it's not more than 0.5% of the global population, at the most.

So, it's pretty safe to say that the whole space is very new and we all are early adopters in a technology that has the potential to be as big as the internet itself, if not bigger. Anyways, since this whole industry is so new, it is pretty natural that "normal people" do not understand it at all or only partially.

As they say, a little knowledge is a dangerous thing and so there have been many myths associated with cryptocurrencies for the longest time now. Even prominent figures like Warren Buffett seem to get it all wrong. Here are some myths that people usually have about cryptocurrencies.

They Don't Have Intrinsic Value, As They're Backed By Nothing

The number one thing I keep hearing from people is that cryptocurrencies are created out of thin air and so there is absolutely no reason that they should have value. Some even mockingly say, "If it was so easy, I would create my own currency and make it worth thousands of dollars."

What they do not understand is that cryptocurrencies are created on a blockchain with algorithms of sorts and just because a central authority is not printing them, like we are used to, it doesn't mean they don't or shouldn't have value. The free market mechanism determines their value like with everything else.

Also, let's take the US dollar for example. It was once backed by gold but that is no longer the case. So, it's no longer backed by anything but the faith and credit of the US government. For a lot of people that means squat! But the faith of the people in the currency, still gives it value.

They Are Only Used For Illegal Activities

The operative term here is "only". Maybe there was once a time when there was a lot of illegal acitivity paid for by cryptocurrencies, but the tables have turned in the past years and now any such illegal activities form only a small percentage of their use.

Today, cryptocurrencies are used for trading, payment settlements, by merchants, as stores of value, and now even institutional players have started dipping their toes which will only make them even more widely used for tons of purposes.

Also, bear in mind that most of the illegal activities in the world are funded by fiat currencies. We don't go around banning them, do we?

You Have To Buy A Whole Bitcoin/Crypto

This is another one that I keep hearing from people. They see that the price of a bitcoin is $4000 and they immediately assume that they have to spend $4000 to buy bitcoin and get into the crypto world.

As we all know, that is not the case. You can buy fractions of any cryptocurrencies (say, 0.001 Btc) and put in as much as you like if you want to test the waters initially.

They Are Ponzi Schemes

Forget common people, even some high ranking ministers tend to think that Bitcoin and its ilk are nothing but ponzi schemes. In fact, the finance minister of India, had said exactly the same thing in his last year's budget speech.

But this couldn't be further from the truth. A ponzi scheme involved someone taking money from you in promises of giving you great returns only to then con you and run away with your money.

How can something like Bitcoin be a ponzi scheme where no one is asking for your money or has offered you any returns. The whole thing is decentralised and there is no one person/team trying to con you of your money.

Yes, there are some cryptocurrencies or projects that are ponzi schemes but that doesn't mean that the whole sector is one. I mean, ponzi schemes are carried out all the time with fiat. Does it make fiat a ponzi scheme?

They Can Be Shut Down By Governments

A lot of people fear that the government could step in at any time and shut down all cryptocurrencies networks. This is due to a poor understanding of what decentralisation means.

As stated above, there is no one person or corporation running a particular coin and as long as it is decentralised enough, it cannot be shut down because there is no single point of operation like some of the other centralised systems like say, Facebook for example.