Is it safe to invest in cryptocurrency?
With the increase in technological growth, the world is rapidly getting digitized, and the idea of digital money is becoming common. That has led to the popularity of cryptocurrency. Although this digital currency has been around for a decade, it has become very popular in the present time. Many people and even some big companies are investing in it. There are many different types (approx. more than 2000 types) of cryptocurrencies, and their number is still rapidly increasing. Bitcoin is widely known, but Litecoin, Ripple, and Ether are also some examples of the cryptocurrency.
Despite its rising popularity, many people still are not aware of what cryptocurrency actually is and how it works. As it is digital money, it is not physical and is completely dealt with online. That means that all the dealings are made online, and it is stored in digital wallets without any need for verification from physical banks. You can buy cryptocurrency in the form of “coins” or “tokens” by exchanging physical money using a credit card. It can also be obtained by a process known as crypto mining
In this process, the dealings between the users are verified and added to the blockchain public ledger. Cryptocurrency is named so because it makes use of encryption to verify dealings. With all the security measures, it is very hard but still NOT IMPOSSIBLE to hack it.
Should you invest in cryptocurrency?
Now that we know about cryptocurrency, we should be aware of the risks related with its investment. Investing in it is very risky due to many factors, and you should thoroughly consider every detail about it before doing it.
1. Volatile nature of the cryptocurrency
You might have seen some people who have become very rich by investing in cryptocurrencies. But that does not mean that you should plunge into it too! There are people out there as well who have lost all of their money in this venture and are nowhere to be found now. If you are thinking about investing in it, you must know that its value keeps on changing. When it goes down, there is no telling when it will rise again. With that being said, it is pretty obvious that investing in cryptocurrency is not very good for people with weak hearts. A specific amount of risk comes with every investment, but in the case of cryptocurrency, the risk is very high. You need to be very careful so that you don’t lose your hard-earned money.
2. No guarantee of refunds or getting your money back
If you are investing in cryptocurrency, then you must prepare yourself to bear the money losses. Let’s say you lose your money, there is no guarantee of getting them back. The ups and downs in its value do not follow any pattern, and it is almost impossible to know what will happen next. With a lack of enough data and credibility, cryptocurrency is not much feasible for a long-term investing plan.
3. Scams and fraudulent activity
Remember! The cryptocurrency is DECENTRALIZED! That means that your dealings are not backed by the protection of the government, and you don’t have any legal protection. They might make tricky deals with you by, for instance, making you believe that you will make a lot of money or promising you to double your investment. Money laundering is also quite common in the crypto industry. In short, there are high chances of getting scammed and losing your money without any signs of getting them back ever! So, if you are going to invest in cryptocurrency, watch out for scammers.
Cryptocurrency is a very risky investment and not a good method of making money. If you want to invest, you must seriously consider all the risk factors related with it, or else, you will just end up losing all of your precious money. Just because something is hyped, it does not mean that it is always good or beneficial. If you ask me, it is not completely safe to invest in cryptocurrency. Now the rest is up to you to decide!
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Last Modified: May 25, 2021 at 5:52 am