Cryptocurrency is one of the most known components of web3. The technology is seen as the future of finance, providing value and utility.
As a new wave, crypto has its share of misconceptions, oftentimes more prevalent than the facts. Together with its boom, the technology has seen its fair share of myths and rumors based mainly on users’ misunderstanding of how it works. With its multitude of use cases ranging from being used as a medium of stored value to a form of investment, it is important that users fully understand the fundamentals of how crypto works. Fortunately, just with a few clicks it’s easy to go beyond the clickbait and separate fact from fiction about this interesting new technology.
1. Crypto is unsafe because it’s untraceable
One of crypto’s main features is its pseudo-anonymity. Accounts are turned into online addresses or “wallets” composed of a unique combination of numbers and letters. The beauty of this feature is that it makes transactions transparent. By nature, crypto transactions are viewable through what is called a public ledger. Public ledgers record all transactions effectively making them traceable. Any user can monitor or view transfers through blockchain scanners, and they can even track where their coin is going after being used for online transactions.
This level of transparency is even more evident with crypto exchange platforms which are required to collect information that can then be attached to digital wallets. Having this level of transparency discourages any illicit use of crypto on these platforms and allows more safeguards to be put in place protecting users and making transactions safer than ever.
Companies and groups like Chainanalysis also utilize crypto’s transparency to detect illegal activities. Data collected from these methods are provided to law enforcement and have led to the arrest of major perpetrators and even the recovery of lost or stolen funds such as the recent Curve incident where…
