This myth reminds me of my old after-school job. I worked almost every day during high school to scrape together enough money to go to the movies with my friends and still have some left over to buy another little piece of bitcoin every week.

The beauty of bitcoin is its divisibility. You don’t need to buy a whole bitcoin to get started. Bitcoin can be divided into incredibly small units, with the smallest being a “satoshi,” which is one hundred millionth of a bitcoin. It’s like being able to buy a tiny fraction of a gold bar instead of having to purchase the whole thing.

When I made my first investment, I didn’t start with much. And that’s the key point here: You can start with whatever amount you’re comfortable with, even if it’s just $10.

The notion that bitcoin is only for the wealthy might stem from the headlines about bitcoin millionaires or the high price of a single bitcoin. But don’t let that fool you. The barrier to entry is much lower than many people realise.

Another myth I often encounter is the idea that bitcoin is destined to replace traditional currencies. This one usually comes from both the overly optimistic crypto investor as well as the hardcore sceptics. While I’m bullish on bitcoin, this view oversimplifies a complex reality.

The idea of a decentralised currency that cuts out the middlemen and bypasses banks, governments, and borders is attractive, but it doesn’t mean that it beats traditional finance across all metrics.

The truth is that traditional fiat currencies like the Australian dollar serve important functions in our economies. They’re deeply integrated into our financial system and can’t just be replaced overnight—or perhaps ever entirely replaced.

What I see happening instead is a coexistence. Bitcoin and other cryptocurrencies are carving out their own niches in the financial ecosystem. They’re particularly useful for cross-border transactions, as a store of value against the debasement of fiat currencies, and as a catalyst for innovation in financial services.

However, for day-to-day transactions, most Australians will continue to pay with AUD, as it is the most widely accepted and easiest to use.

That said, bitcoin is pushing traditional financial systems to evolve. We’re seeing increased interest in digital currencies from central banks, faster and cheaper international money transfers, and a general rethinking of how money works and integrates in our world.

I can’t tell you how many times I’ve heard this one. During my time at Crypto Tax Calculator, an Australian startup that helps investors automate their crypto taxes, I have realised how many people think cryptocurrency is “untraceable” and an easy way to avoid tax.

However, this couldn’t be further from the truth.

Every bitcoin transaction is recorded on a public ledger called the blockchain. While this ledger doesn’t contain names or personal information, it does show the addresses involved in each transaction. These addresses are like pseudonyms–they’re not directly tied to your identity, but it’s easy to find out who owns them.

Think of it like writing a book under a pen name. People might not immediately know it’s you, but if someone puts in the effort, they can probably figure it out.

Many companies and government organisations are dedicated to linking real-world identities to blockchain wallet addresses. One simple method is to trace the transactions back to centralised exchanges, which require users to complete identity verification.

This doesn’t mean bitcoin isn’t private–it can be, with the right precautions. But it’s a far cry from the “untraceable digital cash” that some people imagine.

If I had a dollar for every time I’ve heard this one, I might actually be a millionaire. This myth is particularly pervasive, and I’ll admit, becoming a millionaire overnight is a fun thought to entertain.

Yes, some people have indeed made fortunes with bitcoin and cryptocurrencies in general. But for every bitcoin millionaire story, there are countless untold stories of people who’ve lost money.

The reality is that bitcoin’s price is highly volatile. Over the years, it has skyrocketed to crazy heights multiple times, only to come crashing down months later. I’ve experienced the euphoria of watching my investment multiply and the gut-wrenching feeling of seeing it plummet. It’s a rollercoaster ride and certainly not for the faint of heart.

Moreover, the days of turning a few dollars into millions through bitcoin are likely behind us. The explosive growth we saw in the early years is unlikely to be repeated to the same degree. While there’s still potential for significant returns, the amount of capital required to make bitcoin’s price double is much more than it once was.

The most successful bitcoin investors I know are those who approach it with a level head. They understand the technology, believe in its long-term potential, and, most importantly, don’t try to “time” the market.

My approach to investing in bitcoin is based on my belief in the technology and its ability to protect against currency debasement, not because I expect to become a millionaire overnight. And that, I think, is a much healthier perspective to have.

Despite being untrue, this is still a widespread myth. A report by Chainalysis, a respected blockchain analysis company, found that in 2023, only 0.34% of cryptocurrency transactions were associated with illicit activity—a tiny fraction of the total volume.

Sure, when bitcoin was first created, one of the first platforms to adopt it was the infamous Silk Road marketplace, which didn’t do bitcoin any favours in terms of public perception. However, just like cash, bitcoin can be used for both legal and illegal activities. The technology itself is neutral.

In reality, the vast majority of bitcoin transactions are completely legitimate. I’ve used bitcoin to make online purchases, pay for services, and even donate to charities. Many major companies, from tech giants to travel websites, now accept bitcoin as payment. It’s becoming increasingly mainstream.

Moreover, the idea that bitcoin is the perfect tool for criminals doesn’t hold up to scrutiny. The same lack of perfect anonymity I previously mentioned also makes bitcoin a less-than-ideal choice for illicit activities. Every transaction is recorded on the blockchain, creating a permanent, public record that’s easy to track.

So next time someone suggests bitcoin is only for fraudsters, you can set the record straight. Like any technology, it can be used for good or evil. The criminal narrative is just that—a narrative, and an outdated one at that.

This myth stems from a fundamental misunderstanding about how bitcoin operates.

Bitcoin’s strength lies in its decentralised nature. Unlike traditional financial systems that have central points of control, bitcoin operates on a network of thousands of computers spread across the globe. There’s no single server to unplug, no headquarters to raid, and no CEO to arrest. It’s a bit like trying to shut down the internet itself—theoretically possible but practically unfeasible.

Think about it this way: even in countries where bitcoin has been officially “banned,” people still find ways to use it.

That’s not to say governments can’t impact bitcoin. They absolutely can, and they do. We’ve seen how regulatory announcements can affect bitcoin’s price and adoption rates. Some countries have made converting bitcoin to local currency difficult or even banned crypto exchanges entirely.

These actions can certainly create hurdles, but they fall far short of “shutting down” bitcoin and, in fact, actually strengthen bitcoin’s use case as these restrictions often highlight just how much control central authorities have over your personal finances.

This is a thorny issue, and without digging below the surface, it is easy to assume that it is the truth.

Let’s face it: bitcoin does use a lot of energy. The process of mining new bitcoins and validating transactions, known as proof-of-work, requires significant computational power. This has led to concerns about bitcoin’s carbon footprint, and it’s a valid point of discussion.

However, the blanket statement that bitcoin is bad for the environment oversimplifies a nuanced issue. Here’s why:

Firstly, a significant portion of bitcoin mining is powered by renewable energy. Data from Glassnode shows that the global bitcoin mining industry’s sustainable electricity mix is now above 56%, and it’s on an upward trend. This makes bitcoin mining the only global industry that derives the majority of its energy from renewable sources.

Why is that? Miners are incentivised to seek out the cheapest energy sources, which increasingly means renewable energy like hydroelectric, solar, and wind power.

Secondly, bitcoin mining can actually incentivise the development of renewable energy infrastructure. There are dedicated companies that bring shipping containers of bitcoin mining hardware to the sites of new renewable energy projects so that the energy can immediately be put to use instead of wasted, offsetting project development costs in the process.

It’s also worth considering the environmental impact of the traditional financial system. Banks, ATMs, card networks—all of these consume energy, too. While it’s difficult to make a direct comparison, some argue that bitcoin’s energy use needs to be considered in the context of the value it provides as a global, decentralised financial network that anyone with an internet connection can use.

When I bought my first bitcoin at 15, most people told me it was just a passing fad. The same thing happened during the bull run of 2017 and again in 2021. Fast-forward to today, and I’m still hearing the same prediction from the same people.

Let’s put this into perspective. Bitcoin has been around since 2009, which is over 14 years of continuous operation. In the rapidly evolving world of technology, that’s practically an eternity. Many of the tech giants we take for granted today—Instagram, TikTok, OpenAI—didn’t even exist when bitcoin was created.

But longevity alone doesn’t disprove the “fad” label. What’s more telling is bitcoin’s growing adoption and integration into the mainstream financial system. When I started, buying bitcoin was a convoluted process, but now you can buy bitcoin through PayPal and numerous financial apps.

Major financial institutions that once dismissed bitcoin are now offering crypto services to their clients. We’ve seen the launch of Bitcoin futures markets on established exchanges like the CME and BlackRock launching a spot BTC exchange-traded fund. El Salvador has even adopted bitcoin as legal tender. These are not the hallmarks of a passing fad.

However, even if bitcoin itself were to fade away (which I personally think is unlikely), its impact would endure. Bitcoin introduced the world to blockchain technology, spawning an entire industry of cryptocurrencies and decentralised applications. It’s challenged our conceptions of money and sparked important conversations about financial systems and monetary policy.

From my perspective, calling bitcoin a fad is like calling the internet a fad in the 1990s. Sure, it’s disruptive, and not everyone understands it yet, but it’s showing all the signs of a transformative technology that’s here to stay.

While it’s crucial to approach bitcoin (and any investment) with a clear understanding of the risks and realities, it’s equally important not to let outdated myths cloud our judgement. As bitcoin matures and evolves, so too should our understanding of it.

Whether you’re a crypto expert or just starting to explore this space, it’s vital to keep learning, stay informed and form your own opinions based on facts rather than fiction. The digital asset market is complex and constantly evolving, which is part of what makes it so interesting.

This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class.  Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.