Everyone is familiar with the new concept of digital economy that is realized through cryptocurrencies. The information coming from the most diverse media present it, sometimes, as the currency of the future and, in others, as an asset on the verge of collapse. So, is it safe to invest in digital money?
For those who still do not know what cryptocurrencies are, suffice it to say that it is a type of exclusively digital currencywhich only has exchange value within the internet. Cryptocurrencies are digital assets that use cryptographic encryption to ensure the ownership of their owners, the integrity of any transactionas well as preventing anyone from copying these digital files.
Cryptocurrencies have been introduced to the financial market with a number of advantages over traditional moneywhich is what has given it momentum and popularity. Among other things, they are not subject to state controland therefore cannot be taxed and cannot be seized in any way. Likewise, does not require any financial institution for its storage and distribution, so it will be free of fees and interest. Digital money belongs only and exclusively to its owner and is stored in so-called digital wallets.
The main risks of investing in cryptocurrencies
How to avoid losing money buying Bitcoin, Ethereum, Litecoinm Dodgecoin or some of the more than 10,000 virtual currencies that exist in the market should be the main question that everyone who is interested in investing in these digital assets knows how to answer. To be safe, in this regard, the following recommendations should be followed.
Do not make mistakes
Director of cybersecurity firm Kraken, Nick Percoco, warns that the main factor to consider when deciding to take this step is the individual responsibility.
This responsibility, regarded as a fundamental feature in the movement of this type of currency, comes to warn that the sending of assets to a certain address is an exclusively personal action which will have no solution if it is done erroneously. There is no one else, no association or entity to claim the error or seek damages from.
Therefore, the formation should be one of the first and inevitable steps before you start investing in cryptocurrencies. A reality that is not carried out effectively anywhere. It will be the investor himself who will have to look for and hire an academy or course that will offer him proper quality training.
Cyber attacks
This is another of the supposed risks involved in working with virtual money. However, the security of cryptocurrencies is enormous, so much so that it would take more energy to try to steal bitcoins than to produce them. While it is true that the weakest part, electronic wallets that each user possesses, is the target of attacks. This theft is carried out by means of phishing techniqueswhich are easier to perform by hackers and other computer thieves. There are specialists who manage to find out passwords to online exchanges and wallets with some ease.
An attack on the blokchain
It’s a rare exploit, as for the blockchain to be compromised it must be carried out with a consensus attacki.e. 51% or more. In this type of aggressions an individual with bad intentions will have to take control of half of the cryptocurrencies in order to manage it. A rather unlikely situation, but if it were to happen, its effect would be useless. And is that users seeing this danger nearby would sell their coins to go to another blockchain, so the thief, even having all the coins in their possession, would not know what to do with them, because there would be no demand.
What is blockchain?
The blockchain eliminate the action of banking intermediaries, since they they decentralize the entire exchange management. With this system the digital money, which are the cryptocurrencies, is left in a absolute control in the hands of the usersnot the banks. It is the owners of cryptocurrencies who become a node in a system with billions of other nodes that make up, roughly speaking, a huge bank. Each of them is the absolute protagonist of their money in the manager of the ledgers of that huge bank.
In short, it is an enormous ledger of entries in which each record counts as a block, linked together and securely encrypted to maintain privacy in all transactions. To understand it more easily, we could say that it is a distributed and very secure database due to its encryption, which is applicable to any type of transaction, beyond the purely economic ones.
