Are cryptocurrencies safe? Should you invest in? Before we start talking about the cryptocurrencies with a popularity rising non-stop, let’s first try to understand what cryptocurrency actually means.
What is cryptocurrency?
If you were to look up “crypto” in a dictionary, you would see that it meant “hidden, secret”. We call the virtual currencies based on the cryptology technology with no physical existence cryptocurrency. True, they are not physical. Any payment of a product, or service –you name it-, can be made in cryptocurrency and it’s also possible to convert them to cold, hard cash at will.
It’s what we call the blockchain technology most of the cryptocurrencies use, and it is of high importance when it comes to data privacy. Today, we have over 100 cryptocurrency on the market and this number increases daily, and those which are weak and has no future eventually fail.
For they are the first cryptocurrencies, Bitcoin, Ethereum, Litecoin and Ripple are the leading ones on the market. I’ll use Bitcoin to talk about the cryptocurrencies’ future because it’s the first cryptocurrency and it’s well known among people.
If there’s one thing important about cryptocurrencies, it’s privacy. Privacy is so important that we don’t even know who is the creator of the Bitcoin. There is a “Satoshi Nakamoto” name going around but who –no- what the hell is “Satoshi Nakamoto”? A fake name? A government? The name of a secret organization? Nobody knows.
How to use the cryptocurrency?
You are able to use cryptocurrencies for two different purposes ;
1- Becoming a member of a suitable cryptocurrency market and profiting from trades.
2- Getting the suitable technical hardware and profiting from cryptocurrency mining. (This way is not recommended because i. it uses too much electricity ii. it gets harder every day to mine cryptocurrency).
Is cryptocurrency safe?
Cryptocurrencies may be private, but private doesn’t always mean safe. If you wonder, yes, cryptocurrencies are safe but what about the markets they are on? The Chinese cryptocurrency market Nicehash have lost thousands of Bitcoin nearly worth 60 million dollars to a cyber attack and this created a new argument.
It will remain a mystery who stole the bitcoin and what they were used for since it’s impossible to track the path of the stolen bitcoins, and the victims will never be paid back because there isn’t a central power that controls the bitcoin. We can also argue that Nicehash was hacked after the cyber attack. Or was it the owners of the Nicehash that emptied its market? And are we going to see similar incidents on different markets?
Is it wise to invest in cryptocurrency?
There has been a time where Bitcoin was about 14.000 – 16.000 dollars and everybody tried to invest, and after a time it got old and there was a drastic drop in the Bitcoin prices.
But is it still possible to buy bitcoin at these levels? Is it possible to invest in cryptocurrency?
I’ll use a bitter memory of a friend of mine and a simple statistic to answer this question.
“It’s the year 2015, and I’m using Bitcoin for making a fund transfer to a company. Bitcoin didn’t worth much around those times. I did think about buying Bitcoin but I thought it was only a sentient value the Bitcoin got without a valid economic ground and it wouldn’t be wise to buy Bitcoin. You need to do the right thing at the right time, which I didn’t. Bitcoin prices have seemingly rised a lot and it’s not a bad idea to invest in Bitcoin while the prices have dropped.”
Looking to the statistics, I mean, graphs, it’s always a drop followed by a drastic rise of the prices when it comes to Bitcoin. Every rise of the price after a drop always broke a record. It can be a sign that Bitcoin prices will go higher. But it’s still about your appetite for risk if you are going to invest in Bitcoin.
The talk about cryptocurrency
IMF Headchair Christine Lagarde: “A regulation about the cryptocurrency is unavoidable. An institution based regulation was held 10 years after the financial crisis. But we need to switch to an activer regulation system from now on.”
While there is a serious group of people who defy the cryptocurrencies use as a financial instrument, there are also people who wait for new record prices on cryptocurrencies just as big. Today, the positive or negative cryptocurrencies in many news sites, economic forums and shows, are one of the most popular topics which means we should try to adapt to this new currency system before holding any pre-judgments. Cryptocurrencies don’t rely on a physical entity and they serve us with an uncontrollable economic model.