10 Bitcoin Scams, Criticisms, and Myths Explained

This article breaks down the most common myths, scams, and criticisms surrounding Bitcoin and cryptocurrency in a straight-up, no-hype way. It’s written for skeptics, late adopters, and anyone who’s crypto-curious but allergic to bullshit.

If you’re looking for ‘moon math’, doctored influencer screenshots, or laser-eyes memes —this isn’t that. This is for people who actually want to understand what Bitcoin is, what it isn’t, and why it refuses to die.

I originally wrote this article around 2017 –and it’s been completely rewritten in 2026 to ensure nothing is left out.

The Bitcoin Hype Is Still Real

Let’s be honest: there’s still a fuck ton of hype around Bitcoin and cryptocurrencies in general.

There always has been—and probably always will be. Their functions, limitations, and strengths are evolving daily– and so are the legal frameworks surrounding them. 

That’s exactly why we need a grounded, sober breakdown for beginners and financially cautious people. Ironically, those who are the most critical of Bitcoin today are often the ones who become its strongest advocates tomorrow—once they understand it.

A lot of early criticisms of crypto are quietly falling apart as it moves deeper into the mainstream. Like every disruptive technology, it faced a binary outcome: fade out as a bubble, or embed itself into the system.

At this point, crypto has clearly chosen the latter.

Altcoins built on blockchain technology will continue to rise and fall—many will fail—but the underlying technology isn’t going anywhere. Somewhere between the chaos of exchange charts and brutal volatility lies opportunity for traders, builders, and long-term holders alike.

What really separates Bitcoin from everything else, though, is its controlled deflationary design. No central bank. No emergency money printing. No surprise dilution. Just math.

That means traders can profit from volatility, while long-term holders (yes, HODLers) can benefit from scarcity over time.

By now, you probably understand why the hype exists. Let’s cut through the noise and deal with the ten biggest myths Bitcoin still has to overcome.

1. “Bitcoin Is a Scam”

This one never dies.

We covered this years ago in discussions about what money actually is, but the irony remains: most people calling Bitcoin a scam never question fiat currency.

The US dollar hasn’t been backed by gold in decades. It’s printed at will, governed by institutions most people don’t understand, recorded on ledgers few ever see, and diluted continuously.

A $5 bill used to buy a meal. Today, it barely covers a snack.

According to inflation data, $20 in 1913 is worth over $600 in 2026. Even more relatable: $20 in 1981 is roughly $70 today. That’s over 250% inflation, while wages have lagged badly behind.

Once you fall far enough down the crypto rabbit hole, the status quo starts looking far more scam-like than Bitcoin ever did.

Bitcoin vs. the US Dollar

Bitcoin is the most widely adopted cryptocurrency, so it’s the focus here.

Its supply is hard-capped at 21 million coins, released on a predictable schedule. Roughly every four years, the issuance rate is cut in half. The most recent halving occurred in 2024, with the next expected in 2028.

This makes Bitcoin digitally scarce—more like gold than fiat, but with absolute supply certainty.

Once all 21 million coins are mined (around 2140), Bitcoin becomes fully deflationary. If you buy one Bitcoin today, you’re holding a fixed percentage of the total supply—forever.

That concept still breaks people’s brains. But so did the internet. Now it’s considered a utility—and even a human right in some countries.

History consistently shows that currencies with controlled supply outperform those governed by political discretion. Fear, uncertainty, and doubt rely on emotion. Bitcoin relies on math.

Zoom out, and the trajectory becomes obvious: Bitcoin is decentralized money on a collision course with the legacy system.

2. “A Fixed Supply of Money Is Dangerous”

This criticism usually invokes the dreaded deflationary spiral: prices fall, people stop spending, businesses collapse, jobs disappear.

The problem? This assumes deflation is sudden, unexpected, and chaotic.

Fiat Reality Check

Under fiat systems, currencies fluctuate wildly based on policy decisions, debt, and market panic. Inflation pressures wages upward, reduces hiring, crushes small businesses, and fuels the gig-economy treadmill—something clearly visible in both Western countries and places like the Philippines.

Controlled Deflation Is Different

Economist Russ Roberts has pointed out that Bitcoin’s deflation is predictable. Markets can adapt when they know what’s coming.

Unexpected deflation causes damage. Expected deflation changes behavior.

Keynesian economists argue deflation discourages spending. Austrian economists counter that it rewards savings, lowers interest rates, and encourages long-term investment by reducing production costs proportionally.

Bitcoin doesn’t impose fixed future prices. If its value rises, future expenses simply require fewer satoshis. There’s no inherent incentive to freeze the economy—only to store value efficiently.

And remember: Bitcoin won’t even reach its full supply for over a century. If adjustments are needed, there’s time.

3. “Bitcoin Is Illegal”

In 2026, this claim is outdated.

Bitcoin is legal in most G7 countries and across the EU, which introduced comprehensive crypto regulation under MiCA in 2024. Most governments now classify crypto as property, commodities, or digital assets.

Countries Where Bitcoin Is Banned or Severely Restricted (as of 2026)

• China
• Algeria
• Bangladesh
• Bolivia
• Egypt
• Morocco
• Nepal
• Tunisia
• Afghanistan
• Iraq
  

Always check local regulations—this isn’t legal advice.

In the Philippines, Bitcoin is legal and regulated through the BSP, with licensed exchanges operating openly.

Taxes (Yes, Unfortunately)

Governments want their cut.

In the US, crypto is treated as property—capital gains apply. In the Philippines, the BIR expects reporting on trading activity.

Regulation cuts both ways. It reduces fraud, forces exchanges to improve security, and brings legitimacy. Exchanges like Binance, OKX, Kraken, and Gemini now operate under clearer regulatory frameworks.

You may still avoid outrageous remittance fees, currency conversion costs, and banking friction—but taxes aren’t disappearing.

4. “Bitcoin Is a Ponzi Scheme”

A Ponzi scheme is a top-down fraud promising guaranteed returns where early participants profit directly from later victims.

Bitcoin doesn’t fit—at all.

There is no central operator. No promises. No recruiting rewards. No payouts from new entrants.

Early adopters benefit the same way early investors in Apple or Amazon did: by recognizing value early and taking risk.

If anything, MLMs—especially those rampant in developing countries—look far more Ponzi-like than Bitcoin ever has.

Yes, projects like BitConnect were scams. Bitcoin is not.

Confusing the two is intellectual laziness.

5. “Bitcoin Got Hacked”

Bitcoin itself has never been hacked.

Exchanges have. Devices have. Humans have.

The Bitcoin blockchain is secured by massive decentralized computing power. Altering a past transaction would require re-writing every block after it—faster than the rest of the network combined. A theoretical 51% attack is so expensive it borders on fantasy.

Protecting Yourself

• Don’t store large amounts on exchanges
• Use hardware wallets (Ledger, Trezor)
• Keep software updated
• Assume phones are compromised
• Back up keys offline
  

Lose your private keys, and your Bitcoin is gone—just like cash.

6. “Bitcoin Is Untraceable”

It isn’t.

Bitcoin runs on a public ledger. Every transaction is visible. Wallet balances can be inspected by anyone.

While identities aren’t baked in, exchanges require KYC. Transaction analysis can link wallets via patterns, IP data, and on-ramps.

In many cases, physical cash is more anonymous than crypto.

7. “Bitcoin Is Used by Criminals”

So is cash, what’s your point?

Criminal use doesn’t invalidate a technology. The same $20 bill can fund an addiction or a kid’s lunch.

Bitcoin leaves a permanent record. Criminal investigations increasingly rely on blockchain analytics.

Law-abiding users have little to fear.

8. “Governments Will Shut Bitcoin Down”

They’ve tried.

Instead, we got Bitcoin ETFs (2024), national adoption experiments (El Salvador), and regulatory frameworks.

Bitcoin’s market cap hovers around $1.4 trillion. Shutting it down would be economically suicidal—and technically impossible.

Decentralized networks don’t have off switches.

9. “Merchants Don’t Accept Bitcoin”

They do—and it’s easier than ever.

• Shopify plugins
• Coinbase & Crypto.com cards
• BitPay integrations
• Lightning Network for instant payments
  

Digital nomads or passport bros in Southeast Asia may prefer to use the Philippines’ Coins.ph which allow bills, load, and payments directly from cryptocurrency –in addition to offering exchange functionaly.

Adoption is uneven, but growing.

10. “Bitcoin Is Worthless”

As of early 2026, Bitcoin trades around $70,000, with a market cap rivaling major global corporations.

Value doesn’t come from physical substance. It comes from utility, scarcity, and belief—the same forces backing fiat currency.

Bitcoin:

• Transfers value globally in minutes
• Has fixed supply
• Reduces financial friction
• Enables new financial systems
• Operates without permission
  

That’s not worthless. That’s disruptive.

Bonus Myth: “Bitcoin Is Bad for the Environment”

Mining increasingly uses renewable energy, stranded power, and grid balancing (notably in Texas). Compared to the global banking system, Bitcoin’s energy narrative is wildly oversimplified.

Final Thoughts

Bitcoin isn’t a scam. It isn’t perfect either.

It’s an opt-in, decentralized monetary experiment that refuses to disappear—despite a decade of obituaries.

Conspiracy theories aside, the trade-offs increasingly favor participation. Whether you buy, hold, build, or ignore it is up to you.

Just make sure you’re informed. I bought my tinfoil hat with Bitcoin.