Are you still unfamiliar with the algorithm of cryptocurrency and how it works? Then, this article is mainly for you.
Cryptocurrency is a form of an asset that exists only digitally or virtually. It is a decentralized system based on a cryptography blockchain which makes it nearly impossible for insecure transactions.
By a decentralized system, we mean that any centralized authority does not influence it and all individuals have collective control over it.
Now have a look at facts and figures about cryptocurrency. You will get surprised to know that approximately 300 million people around the globe used cryptocurrency in 2022. You can estimate the upward growth of crypto users.
And more surprisingly, the cost of one bitcoin is $16718.80 on the day I publish this article. What an incredible value that is!
But this value gets changes from minute to minute and time to time. Occasionally, it faces high ups and down. Another feature that makes it prominent is that it is beyond the control of any government or monetary authority.
You may ask if it is not issued by any central government then how it is safe to invest in cryptocurrency? Well, it is a very complicated question. The question has two levels of consideration.
The first meaning of your question may be, you have the plan to invest in crypto and want to know the investment risks in cryptocurrency because this type of bargaining is not a childish play and even a small mistake may result in sinking your entire wealth.
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If you’re truly interested in crypto, we suggest you only take as much risk as possible to forfeit your investment. Maybe you’ve ever heard some people saying that venturing into crypto may make you a billionaire overnight but they will never tell you that it may also make you bankrupt. As past experiences indicate, it is not an unrealistic aspect.
Let’s have a view at a computation report which is made by Glassnode.com, a firm that provides data and knowledge about the crypto market, this report reveals that around 40 per cent of bitcoin holders have lost their money in the crypto market.
Yes! look again. 40 per cent of bitcoin owners are those who have lost their money. So, a fall in the value of crypto may harm you anytime.
Bitcoin was released in 2009. Since then, it has crashed seven times worse. But the currency has the characteristic that it crashes as well as stabilizes. However, a great downfall in the value, as it was seen in 2011 when it crashed from $32 to $0.01, can never be withstood. Regardless of being an investor, you must have an awareness of these aspects.
The other possible threat that you may face is the hoaxers that may hack your digital wallet. How many people have lost their money due to scams? As per a survey carried out by the Federal Trade Commission (FTC), since the outset of 2021, almost 46000 people have become prey to scammers in the mysterious world of crypto.
Do you know about the cryptocurrency exchange wormhole? This wormhole lost $320 million due to a cyber attack. So cyber attacks have a deep link to the crypto market.
On the other hand, if you lost your digital assets, no one is there to resolve your complaint. Only you’re responsible for the control of your virtual assets. So be cautious with scammers.
Is there any technique to be safe from these scammers? Why not? If you follow our given strategy, we’re sure that your chances to fall prey may reduce to none.
If you are a newcomer in crypto investment, your first and foremost duty should be conscious of the three main tenets of crypto investment.
- Always invest as much money as you can afford to lose. Your investment may get lost, unfortunately, if this happens, it should not cause stress in your life.
- If someone insists on payment only via cryptocurrency, be careful he is a scammer.
- For example, you have $1000 to invest, so don’t invest all the money at once, I highly recommend you invest at intervals. Initially, invest only $100 and after it, try to learn from your experience.
By practicing this course of action, your experience regarding the crypto market will build and you will become familiar with its trends.
Now after understanding cryptocurrency, you also invest in it. Hoping that the value of the coin I bought will go up and I will make a profit.
But, have you ever thought that the investment which you have saved in an online wallet, is safe or not? Because the websites such as binance.com, blockchain.com or coinbase.com, and others claim so-called security for your digital wallet, but actually they also face security risks at certain levels.
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Your wallet is saved on their server and you have nothing to do with this except limited access through your username and password. You don’t even have total control over your wallet. This is the only factor that I mentioned, the other factor is that all digital currencies are not far from hackers to hack.
Thanks to the blockchain system, which guarantees high security but the threat will remain to occur. Hackers can hack anything that exists digitally. The main issue is that almost all Pakistanis and Indians mostly use cracked software and for hackers, it is very easy to break the security of this kind of software.
Certainly, you will be aware of Dogecoin, when it was first launched in 2013, do you know all its tokens were stolen? Yes, it happened. According to Los Angeles Times, these tokens were nearly cost between $14900 to $17200.
The third factor is that all the websites on which you have saved your funds are firms that have different branches in several countries. They have to follow rules and regulations of those countries. If they break the law, their assets may be confiscated.
Liberty Reserve, a Costa Rica-based centralized digital currency service, is a clear example of it. It was claimed as the oldest, safest, and most popular payment service. Arthur Budovsky, the founder of this Liberty Reserve, was jailed for 20 years due to money laundering, resulting in the shutdown of his digital service and seizure of assets by the US authorities in 2013.
So, these are some issues you can face in the crypto market.
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