The financial industry changed forever when Bitcoin — the first and biggest cryptocurrency — launched in 2009. Since then, crypto and its underlying technology have changed the way we view currencies, make payments, and interact online.
However, this new, technical, and fast-changing industry is easily misunderstood. As a result, several crypto myths have emerged, which might lead to misunderstandings among investors interested in this new asset class. We're here to help. In this article, we unpick five common crypto myths to help set the record straight.
The crypto industry has experienced high-profile scams, leading to substantial financial losses for some users. The high value of major crypto tokens, such as Bitcoin and Ethereum, can attract fraudulent actors.
Despite this reality, many legitimate projects built upon cryptographic technology are making a significant impact to the world around us. What's more, aspects of blockchain technology are designed to prevent manipulation and protect user privacy. However, it's important to remember that while many legitimate projects exist, cryptocurrency trading is highly speculative and isn't without risks.
As a crypto trader, it's essential to be alert to modern crypto scams, how they work, and what you can do to protect yourself.
Although many crypto projects do fail and disappear, the growth of the crypto industry since 2009 suggests that it’s here to stay. This is supported by the rising adoption of crypto and broader Web3 technologies globally, including in Australia. According to reports, approximately 50% of Australians have either purchased or are considering purchasing crypto in 2024 and 2025. Meanwhile, almost one in three Australian adults already own or are considering buying crypto for the first time. Furthermore, 42% of Australians believe that crypto supports their financial freedom, which suggests many people are confident in the technology's future. Australia is also home to numerous local crypto projects that are actively contributing to the development of the digital future.
A common misconception about the crypto industry is that it operates without any formal regulatory framework in place. This perception has led some to liken it to the 'Wild West' of finance. While it is true that regulation is still evolving, the idea that the industry is completely unregulated is inaccurate.
Many governments are actively developing crypto regulations, or already have established measures to protect users and manage industry players. In Australia, the Australian Securities and Investments Commission (ASIC) regulates crypto assets and related businesses to the extent that they involve financial products or services.
Additionally, some crypto companies themselves have adopted self-regulatory practices to promote users confidence. For example, OKX, a prominent crypto exchange that operates in Australia publishes a monthly Proof of Reserves report. The report demonstrates to OKX's users that their assets on the exchange are available to withdraw at any time, contributing to greater transparency in the industry.
New use cases for cryptocurrencies and other Web3 technologies continue to emerge as the industry evolves. Each new use case and legitimate project helps to dispel the common myth that crypto is used solely for illicit activities.
What's more, some of the biggest names in traditional finance are entering the space, recognising its potential. J.P. Morgan, for example, has developed its own blockchain-based payment system. While it is true that cryptocurrencies have been used in illegal activities, such as money laundering, there are numerous examples of crypto's real-world utility and practical applications.
Many crypto exchanges also implement measures to prevent illicit activities on their platforms, including conducting Know your Customer checks to verify users' identities.
Although crypto adoption is growing, and some merchants have begun to accept crypto payments, cryptocurrencies are more likely to complement rather than replace fiat currencies. Governments, through central banks, control monetary policy and will likely continue using these established frameworks to ensure economic stability. As a result, the coexistence of fiat and crypto is a more plausible scenario, and one that is already occurring today.
Furthermore, the inherent volatility of cryptocurrencies presents a significant challenge to their use as a stable form of payment. In addition to that, a digital barrier exists, as not everyone has access to the technology needed to use crypto for everyday transactions. Consequently, fiat currency remains essential for financial inclusion, while crypto offers innovative solutions alongside traditional financial systems.
Curious to learn more about crypto and how it works? Why not start at the very beginning with our article on what Bitcoin is.
Start trading with OKX and earn up to $20 AUD in BTC when you sign up and trade $100. New users only. T&Cs apply. Get started here.
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