August 5, 2020
Cryptocurrencies also widely known as digital assets that are designed to work as a medium of exchange wherein individual coin ownership records are stored in a decentralizes ledger, existing in a form of virtual database using strong cryptography that secures transaction records. The concept of digital/virtual money seemed far-fetched at initial stages. Earlier people didn’t have proper knowledge about transacting with virtual currency. Though cryptocurrency is known and talked about globally, people still have their doubts and pre-conceived notions about how crypto market and virtual currency works. Let us discuss on the common myths:
Ignorance and lack of knowledge:
With the first successful implementation of blockchain with Cryptocurrencies, the concept of decentralization, where the entire system does not rely on one authority, suddenly became more than possible. With this fairly new technology in crypto world, the middlemen were no more required due to the presence of a distributed ledger technology. People are used to traditional methods of investments with centralized authority being in charge of transactions. Hence, the network of nodes, or individual computers, powering the transactions all around the globe added up another factor of fear in investors.
Hence the solution is to educate people regarding blockchain technology and its relevance with cryptocurrencies. It will enable new and small investors to draw their investments in right places.
Credibility and transparency:
There are more than five thousand cryptocurrencies in the market right now, thus it becomes difficult to understand which one to invest in. Along with that there is not much information available about these companies and their owners or founders. People are not aware of the background of these companies and hence there is mistrust in minds of people.
One needs to do a proper study and research before making any investments. Check the companies and its projects properly and not make hasty decisions.
As the market is growing tremendously in last few years, new cryptocurrencies are launching and it is becoming difficult for people to keep a track of these. Some of these projects are still underway, so it is important to study them first and then only put any investments.
Crypto currencies are digital assets, hence they become more vulnerable to hackers and scammers. Apart from keeping a track on how a crypto is performing, one has to have an understanding of keeping their wallets safe and secure. One of the ways to keep your digital assets secure is to understand how wallets and exchanges work. People often fall to vicious emails, links and messages received in their emails to make quick profits. Impersonation is another fallacious act of fooling people with their money, where scammers pretend to help you to make quick profits by managing your profiles.
Being aware and not falling for such activities is really important. Individuals can take extra measures to secure their funds like securing their private key by backing up their wallets. You may also choose from various exchanges that offers exceptional security measures and address the key challenges surrounding security. A deep research is the major factor here to select the right kind of crypto coin and the right time to invest in it with right amount of money.
Like stock exchange, crypto is also a volatile industry and the trends keep changing rapidly. People investing in cryptocurrency have also experienced the highs and lows in the market and understood that this market is meant for long time results. One can make short gains but to build a portfolio, one must learn to HODL and wait for the right time to release the funds to get maximum returns. The volatility is just of the reasons for fear in people’s mind.
Being one of the most volatile investments in the world, the prices might drastically drop or rise just within a few minutes, which is the reason people fear investing in the industry. But on the other hand, crypto investments are also worth taking the risk as its volatile nature itself might get attractive trading returns. A deep insight about the crypto market and your chosen crypto asset is much advisable for investing your money.
The blockchain technology and the crypto world has a massive potential to change the investment trends and eventually take over existing financial activities for a better access to financial freedom for each individual investor. People will take time to get out of their fear for cryptos, but gradually there will be a mass adoption and involvement in the crypto market.