There have been extensive speculation and deliberations about investing in cryptocurrency and the associated risks. It is undeniably one of the most revolutionary inventions of the 21st century that has redefined the financial trends across the countries. However, the industry also has a significant volatile nature that can make or break you in just a matter of seconds. Therefore, it is advisable to assess your investment decisions thoroughly before you embark on a journey that is filled with unsuspecting threats and risks. Things go south when you least expect it and that’s why millions of budding investors & traders resort to crypto courses to get a fair idea of what they are getting themselves into. click here
It is quite appropriate to refer to such digital currencies as “Bubbles” owing to a host of drawbacks that they are widely renowned for. Hence, it becomes extremely important for future investors and traders to acknowledge the risks involved with trading in cryptocurrencies. Needless to say that crypto is the talk of the town and will remain that way for years to come until a more dynamic medium is invented to transact on a daily basis.
Here is a list of some important points that you need to be aware of before you make up your mind for buying a digital currency in the near future:
#1 Regulations
Most of the people are of the view that the cryptocurrency world is not regulated by any governance system or similar authority that can address the grievances of people in times of any mishap. This is one of the fallbacks of investing in cryptocurrency as you have no one to go to in case you fall under the radars of cybercriminals or miscreants that lurk in the shadows.
Seasoned investors are also of the view that the entire system is going to implode one-day owing to the fact that it is not under the control of any designated authority. There will always be a significant amount of risk when you invest in such digital currencies that are not being regulated by any government.
#2 Issues regarding cybersecurity
Being a prominent digital technology that is accessible by almost anyone on the internet, there will always be a lingering possibility of cybersecurity breaches. It won’t be of any surprise either if it gets hacked by seasoned hackers on any given day. The result of such attacks triggers a loss of millions of dollars for the victimized companies in just a matter of seconds.
Furthermore, no one is able to do anything about it but to give in to the outrageous demands of the hackers. With rampant incidences of ICOs being constantly breached that cost close to millions of dollars should already be a red flag for most of the people who view the crypto industry as a massive threat.
#3 Unprecedented volatility
If you’ve known about cryptocurrency for a considerable period of time, then you must also be aware of the inherent price volatility that comes with it. The industry also struggles in terms of inherent value which is why Warren Buffett tagged the whole apparatus of cryptocurrency as a “Bubble”.
It is indeed a worthy concern that needs to be addressed and it is possible through inking the value of such digital currencies to physical and non-physical assets. It will lead to increased adoption by people worldwide and will eventually result in decreased volatility. After all, you must have confidence in what you do and this is an important trait that you must display in this space.
#4 Scalability
The prevailing problem of scaling is what makes a lot of investors & traders scratch their heads. Regardless of the increasing dominance of crypto transactions on a daily basis, it is yet to surpass the trailblazer of payment platforms “VISA” that processes digital transactions way more than digital coins. Moreover, cryptocurrencies have to work extensively towards improving the speed of transactions which is yet another crucial metric that they have to compete for.
Prominent players like MasterCard & VISA have a robust infrastructure that is undeniably massively scaled. However, experts have come up with a host of solutions for scalability in cryptocurrencies. Such solutions have been presented in the form of lightning networks, staking & sharding.
