Cryptocurrencies, crypto assets… What exactly do these terms
cover and what are the risks we are facing when entering the cryptocurrency
Cryptocurrencies are not necessarily regulated. There may be
no legal framework that protects consumers from purchasing goods or services
through cryptocurrency, and digital exchanges may operate without complying
with applicable laws.
The value of a cryptocurrency depends on the public interest
in it. It’s based strictly on supply and demand. The media coverage of a
cryptocurrency can have a large impact on its value over a short period,
without any official body or mechanism overseeing this variation.
Keep in mind that the risk is very present in virtual
currencies. The main risks of trading cryptocurrencies are the risk of
volatility, legal risks, and scammers.
Here are some important things to know about crypto, the
blockchain technology to stay safe from bitcoin scams and frauds.
Bitcoin was initially conceived as an instrument of exchange
in the digital world. The more people get interested in this type of currency,
and more scammers will work on the possible ways to misuse it. They usually
offer exceptional investment opportunities promising to multiply your
investment practically overnight. Runaway if these fraudulent individuals or
suspicious companies promise big payouts in a short time making ungrounded
claims about their business success.
Cryptojacking is a fraudulent activity aiming to misuse your
computer or your smartphone to process the power needed for crypto mining. Of
course, they are doing this without your knowledge or permission by putting
malicious codes into your computer software. You can fall victim to
crypto-jacking just by visiting a suspicious website or a platform.
Usually, they have flashy designs and pops up in the form of
aggressive ads, but can also be more sophisticated to look reliable. In case
you notice that your computer or phone work slower, stay out of the power
quickly, crash with no obvious reason, you might have fallen a victim of this
type of scam. What to do if it happens? The basic advice would be to consider
adding an adblocker, using antivirus and don’t click the suspicious links.
Anyway, before visiting unknown websites and installing new
tools and software, read brokers’ reviews. This is important since many
websites won’t let you use their services if you blocked their software
Avoid crypto scammers – Learn about the online broker
Always check that the financial intermediary with which you
wish to operate is not on the blacklist. You should do your own research and
gather as much information as possible about the trading platform such as legal
status, registered office, financial strength, etc. Checking public information
on crypto brokers may be a kind of protection for you.
Understand the blockchain technology
Before investing in Bitcoin, Ether, Ripple, for example, it
is important to understand the technology behind these virtual currencies. Not
only should blockchain technology no longer hold any secrets for you, but you
should also know what the characteristics of the crypto assets you want to buy
are, know their strengths and limitations.
One of the main and most appealing features of
cryptocurrencies is the anonymity of transactions. However, transactions can be
published on a public list of recorded transactions generated by blockchain
technology. Depending on the cryptocurrency, information can comprise the
amount of the transaction, and the digital wallet’s address.
Your crypto wallet can have two types of keys: the first key
is “public”; it certifies the existence and uniqueness of the virtual currency
The second key is “private”; it is equivalent to a secret
code that the owner stores in his digital wallet.
When making a payment, the owner of a cryptocurrency unit
validates it with his private key. This transaction is then submitted to a
network of miners. They certify the ownership of the cryptocurrency units, thus
validating the transaction and the transfer to the new owner.
Trading cryptocurrency can be profitable which has been
proven so far. That’s also the reason why you should be cautious when entering this
market. You must get to know how the crypto works and what are the risks. If you
are suspicious about some platforms or individuals, don’t hesitate to report to
the authorities. It’s important in order to prevent others from falling victim
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