If crypto is still new to you, it’s likely that you’re both fascinated and a little intimidated. Should you be concerned, though? Not at all; this is where the road to knowing cryptography begins.
Below, we provide a clear, concise explanation of what exactly makes cryptocurrency so fascinating. We also let you know about some of the dangers you should be aware of before participating.
Absence of banks: Greater openness and control at the expense of increased security risk
One of the things that attracted a lot of people to cryptocurrencies when they initially entered the market was their independence from conventional institutions.
When you purchase a cryptocurrency, there are no middlemen involved in the transaction. As a result, you can trade in a system that is far more transparent and doesn’t require you to rely on a third party. In the event that you lock yourself out of your cryptocurrency wallet, there is little to no aid to be obtained due to this freedom.
They can help you retrieve or reset your password if you forget it for a bank service. But when it comes to cryptocurrencies, you’re at the mercy of the incredibly small number of hackers who are able to access users’ “stranded” cryptocurrency wallets for them – and even these attempts are rare.
Volatility: Possibility of large profits, but potential for large losses
The tremendous volatility of cryptocurrencies is well-known. A currency’s value can drop to an all-time low one day and then soar to historically unheard-of heights the next.
Of course, you can always speculate, and many would say that buying when a currency has reached a low is a reasonably safe option. However, in practice, you simply never know. You could become extremely wealthy very quickly if you’re lucky or make the right prediction, or you could lose a ton of money if your prediction is incorrect.
Still want a piece of the action? To learn more about cryptocurrency and to complete your research on its characteristics, read more about it here. Nobody ever damaged themselves by doing research, and you’ll need all the support you can get with crypto.
The blockchain is secure against hackers, but is it long-term scalable
Like we previously stated, it is nearly impossible to hack your way into a bitcoin wallet. The same is true for the rest of the infrastructure supporting cryptocurrency trading.
Entries are recorded in the blockchain forever. Once you submit an entry, it is stored in a decentralized, ultra-secure system across a number of machines. This makes cryptocurrency trading an incredibly safe endeavor in terms of cybersecurity because no hacker will ever be able to access and harm the entire chain.
A fascinating new form of money that requires extensive research
To say that getting into crypto as a total novice is difficult would be an understatement. Contrary to conventional stock markets, which have been existing for hundreds of years, the enormous universe of digital currencies has only been around since the 2000s.
It is very hard to foresee how cryptocurrencies will develop later on or even if they would still be around in, say, 50 or even 25 years. You’ll need to spend a lot of time and energy researching up on cryptocurrency because investing in it is already risky.
But even so, if you do decide to invest, you’re undoubtedly in for a wild trip.