The holiday season is a good time to reflect on the year behind as well as the one ahead. With signs that the crypto winter is ending – and with Bitcoin builder culture holding strong – it’s a good time to review some common Bitcoin FUDs that could dampen enthusiasm in the coming year. A FUD – slang for “fear, uncertainty and doubt” – is used to describe the negative feelings some may have about cryptocurrencies, as well as the spreading of pessimistic rumors or misleading information.
Broadly, FUDs represent the things that make crypto users nervous about the industry’s prospects. These can come from a wide array of sources. Media, competitors, market manipulators, financial institutions and regulators are just some of the ways a FUD can take form. In order to ultimately achieve the goal of mass adoption, it’s important for Bitcoin participants to recognize common FUDs and understand their greater context.
Here are five of the most common FUDs in crypto and some ways individuals can work to debunk them this holiday season:
FUD 1: Volatility
“Bitcoin is a bubble.” The idea that cryptocurrencies are too unstable to make a smart investment is one of the most common FUDs about the industry. This sort of statement is designed to deter participation and to convince potential users that there is too much financial risk to get involved in crypto. But this is a massive generalization.
Cryptocurrencies have been around for more than a decade – Bitcoin was invented 15 years ago. In that time, there have been coins and projects that failed. But to say all cryptocurrency is inherently unstable is false. Stablecoins are specifically designed to avoid the volatility that some coins face, and bitcoin has remained a steady force throughout the years. While there have been ups and downs, BTC has recovered quite strongly from its crypto winter lows. This is not all that different from how stocks have historically performed during uncertain markets; a low price does not inherently reflect problems with longevity.
This is especially true given how robust the Bitcoin builder ecosystem is, even during the most seemingly dire times. Price action often doesn't accurately illustrate new technologies and developments that are still being built and aren't indicative of the broader ecosystem's health.
FUD 2: Security
Security FUDs play a big role in crypto misinformation. Naysayers seek to convince others that crypto wallets and exchanges are not properly secured from bad actors and that your assets will be vulnerable. To an extent, this has been one of the most effective FUDs. A Pew Research study from earlier this year found that the majority of Americans aren’t confident about the safety of cryptocurrency. But cybercrime incidents are not a crypto-specific problem. According to the Harvard Business Review, the total impact of cybercrime “is expected to reach $10 trillion this year.” Security is an issue that encompasses all digital storage and transactions.
The key to combating these uncertainties is education. While headlines revolving around security breaches or data theft tend to focus on high-profile, viral hacks or A.I.-driven crime, the reality is that the vast majority of security breaches are caused by human error – nearly 90 percent, according to a study from Stanford. Understanding the way in which your assets are secured and how to safeguard them goes a long way in avoiding the missteps that can lead to breaches (especially if you're using a self-custodied wallet like Leather). This holiday season, sitting down with less tech-knowledgeable friends or family members to go over some basic security measures can make a huge impact in preventing future breaches and helping to decrease these fears.
FUD 3: Scams
Hand-in-hand with security is scam FUDs. Whether it’s a pump-and-dump scheme or someone using phishing tactics to steal your crypto, proponents of these FUDs would have you believing it’s impossible to secure your tokens. But crypto scams, like data breaches, nearly always require user participation to succeed. Learning more about the various types of scams and how to recognize them is invaluable in preventing scammers from accessing your bitcoin.
This is particularly important during the holiday season, when scams tend to increase. Bad actors know that people are more likely to make online transactions and purchases at this time of the year, and they use that knowledge to their advantage. Crypto users staying vigilant and learning to recognize the warning signs that accompany scams will help lower the number of incidents and improve the industry’s reputation for safety.
FUD 4: Useability
“Bitcoin doesn’t have any real uses.” If you’re in the crypto world, you’ve probably heard some form of this mantra. Whether it’s from a skeptic in your personal life or from an anti-crypto public figure, this has been a common refrain. There are many who push the idea that cryptocurrencies like bitcoin lack significant use cases, with some even calling it worthless. This is a persistent FUD but a frustrating one, because it flies in the face of reality.
The Bitcoin ecosystem is consistently growing. In addition to trading tokens, there are now ways to use it as collateral for loans or to make wire transfers to small and mid-size businesses who want to cut down on fees. Payment processing company Stripe has instituted a “Pay With Bitcoin” checkout button, giving companies access to Lightning. And then there’s the growth coming from Bitcoin NFTs, new protocols like Ordinals, and developments to the Bitcoin DeFi ecosystem on L2s. These opportunities provide users with new ways to utilize their BTC, and with Bitcoin’s builder culture, there are consistently new use cases being derived. When trying to debunk this FUD, the above is just some of the options crypto users can point to.
FUD 5: Uncertain Future
Finally, there’s the uncertainty of it all. One of the most persistent fears Bitcoin opponents push is that the future of crypto is too uncertain. Detractors cite everything from regulation to quantum computing to changes in trends to insist that cryptocurrencies will flounder. These fears are universal to all technologies – it’s not as if external market forces or innovation only impact the crypto industry. And yet, opponents cite these concerns as an example of why people should avoid crypto entirely. But the evidence doesn’t show that users should be particularly concerned. Bitcoin has survived for more than a decade now, and by all accounts, has been having a great year.
With growing use cases, integration from countries around the world and major companies permitting crypto payments for their products, there is plenty of evidence to suggest that cryptocurrency is here to stay. Highlighting the many ways in which Bitcoin has grown and adapted over the years can help combat these doubts among everyday crypto enthusiasts and skeptics alike.
Uncertainty is an inherent part of introducing new technology to society. What’s important is not to let yourself be swept away by FUDs that don’t reflect the reality of the ecosystem. To reach Bitcoin’s ultimate goals of decentralization and democratization, it’s important that users have the knowledge necessary to combat these fears. Educating yourself and sharing that knowledge base with others can help debunk FUDs and promote wider use and adoption.