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Everyone seems to love cryptocurrency. This is obvious because it has given more than it has taken away from the investors. Every investor who tries the concept for the first time has the only motive that he will get big returns in the future and no other option ever comes into his mind. It is true, but only to some extent. Every shining bulb has a place where no light enters and the darkness prevails in the vicinity. Similar is true for cryptocurrencies as well. There is no such thing that you will get a very good return every time for your investment. That can happen due to many reasons about which you will not be aware. In this article, we are going to discuss these points that prove darker for the bright future of investors on the digital platform. Cryptocurrency is based on algorithms and programs that when compiled and run give some currencies of financial nature in return. There are several networks associated with cryptocurrencies called blockchains and every currency has its blockchain. If you are interested in Bitcoin trading, you may consider knowing about Bitcoin and Financial Stability.
Though blockchain is considered to be a secure network for transacting digitally but still the security is not 100%. There are cases wherein the secure network was not much secure. In the past, very big chunks of bitcoins were stolen and the system being of decentralized nature could not even be tracked! This is not a common disadvantage of using a cryptocurrency but is considered to be an event of serious concern. As no one knows who is online so no one can track the real culprit and that is why the thieves still absconding who have made the biggest heists in the history of cryptocurrencies.
Another drawback of using a crypto asset is that it is highly volatile. The value of a cryptocurrency rises and falls quickly and it is not constant. The values are shooting high at a moment and at the same time the values are down in the plummet. No one can predict the actual behavior of the market as the behavior is not generally continuous. Sometimes there are sudden jumps that can make a layman the most influential person in the world and at the same time make a rich person like a beggar.
Some people take anonymity to be a benefit of cryptocurrencies. But this benefit is a blessing in disguise. Though being anonymous is great but this anonymity can prove harmful sometimes. Thieves take advantage of being anonymous and steal money from the chain. As discussed above, tracking thieves is impossible and they enjoy being anonymous. Several organizations have fallen into this trap and have lost much in return.
Comparison with the banking institutions
In a central or state bank every customer has some sort of insurance for the investment made but in the field of cryptocurrency, it is impossible to get a refund of money. So as a result, there is no option of insurance or guaranteeing the returns. This risk is considered to be the biggest risk in the crypto investment because there is no u-turn. During a transaction, if you post money into the customer id of someone then it is irreversible as long as the opposite party reverses the transaction fresh. So, to maintain the sanctity you should always cross-verify the credentials before making the transaction. You should make sure that the person to whom you are paying is the real one and not just the clone. Anything bright has its advantages and disadvantages. Proper knowledge about the subject is a must.