The popularity of cryptocurrency has led many people to be intrigued by it. There are frequent news of either someone making a fortune out of cryptocurrency or losing money to a scam or fraud related to it. This is why many people who have not yet started using cryptocurrencies are often sceptical about the same and wonder if it is really worth investing in such a currency.
Different people have different opinions about the future of cryptocurrency. Many say that as people start shifting more to a digital economy the relevance of cryptocurrencies will only grow whereas there are some who believe that as a lot of cryptocurrencies are non fiat, that is their value is not regulated by the government, they might fall in value as the time passes and will act as wasted Investments. Hence, to know about the true nature of cryptocurrency, it is important to collect information about it from the right and trusted sources. Informative web sources like devdiscourse.com can provide correct and relevant information about the growth of cryptocurrency. There are some factors that can help one in deciding if they should invest in cryptocurrency and if they will get any benefit from it in the future or they are being scammed:
1. The type of cryptocurrency one chooses to invest in
Different cryptocurrencies have originated in different timelines and also have different values that can rise and fall according to the usage and popularity of that particular currency. Although it might not be easy to determine which particular cryptocurrency will rise or fall in the future one should try to invest only in those currencies which are verifiable and wellestablished as compared to the others.
If one chooses to invest in a currency that is rarely heard of by anyone and that is not verifiable then it would be a wiser choice to stay away from it. Verifying of a cryptocurrency can be done by simply tracking down the founders of that currency and reading relevant articles regarding it. The best way to verify it would be to consult someone who has been investing in cryptocurrency for a while. This will help one obtaining the most reliable information.
2. The risks involved
Unlike many other stable forms of investment that are likely to bore mostly positive results, cryptocurrency investment can be a bit more risky. This is because the market of cryptocurrency trading decides its value and if the market becomes volatile, that is its features change very quickly, then the value of that particular currency can also shift rapidly either in the positive direction or the negative one. For example, there have been cases with Bitcoin, currently the most popular crypto, where its value has suddenly increased a lot (around 20 thousand dollars) and then decreased rapidly (to around 3 thousand dollars).
Hence it would not be right to say that investing in crypto currency is a very sure and safe investment. However there are some ways to reduce the amount of loss that one might face due to such an investment.
3. The types of crypto scams
Although such currencies might be safe to invest in, one can face scammers while trying to access the crypto world. Just like any other form of currency one should be extra careful while dealing with passwords related to their Crypto accounts. There can be mails sent with malicious intent that might offer something and lead the victim to a website asking for personal details about one’s crypto wallet. Hence, there can be scams just like those faced in the case of fiat currency that one needs to be aware of.
How to mitigate the risk?
Since investing in cryptocurrency comes with its own set of problems and risks, it is important to know how to minimize losses in case a currency crashes and its value of a particular currency comes down rapidly. Huge businessmen and investors can afford to invest a great sum in crypto trading but such a scenario might not be feasible for a person belonging to the middle class or someone who is just starting their journey in the Crypto world.
Investors like Mark Cuban have given advice regarding this issue by seeing that one should only invest as much as take an afford to lose in case the value of the Crypto comes crashing down. This tells us that even some bigger businessmen are a bit skeptical about the whole crypto trading affair and choose to be on the safer side by investing less.
Moreover even though the price of a single coin might be high investors can choose to buy just a share or section of that coin based on the amount of money they want to spend on it. It is also recommended for new investors to start small and get a hold of the market before investing a huge amount all at one.
In conclusion, it would be correct to say that anything related to money and currency is not always free of any scams. This is because camels are constantly looking for ways to increase their income either in the form of Fiat currency or the newly popular cryptocurrency. Hence even though cryptocurrency seems like a great place to invest since it’s value can increase very quickly, one must also be careful with it due to its volatile nature. This is because it’s value can rise and fall quickly.
For new investors it is important to start slow and invest a lesser amount and gain a perspective on the market before committing to the investment. This patience and Presence of Mind is also needed to ensure that a person does not fall into the trap of scammers who look forward to gain useful personal information like Bitcoin wallet password to deplete the victim of their monetary rejoices. Hence, one must be as careful with crypto as they are with fiat currency.