The success of any investment rests heavily on taking calculated risks. This principle works just as well when dealing with Cryptocurrency investment. While their legitimacy has been a subject of debate for quite a while, there are several success stories, with thousands of people indicating just how much you can benefit if you do it right.
So how safe are they? On paper, Cryptocurrencies are pretty volatile, which makes them a bit riskier compared to other garden variety investments. But, as mentioned earlier, they do have a much larger payout potential, if you take time to learn the digital market and the niche these currencies operate under. Let’s take a look at how safe they are as crypto investment alternatives courtesy of ottomatik.io
Are They Safe?
Every investment has an Achilles heel, by definition, the higher the risk the higher the potential gain. Now, this is not recommendable advice to live by, especially where volatile markets are concerned. This is why it is emphasized that you should do your research before jumping into the Cryptocurrency frenzy.
Learning the market is the one sure shot ways to ensure you don’t fall victim to scammers, and also to safeguard your investment capital. Cryptocurrencies on the market right now are well into the thousands, some legitimate, others not so much. What you need to do is establish a culture of doing comprehensive background checks on affiliates, trade partners, if they trade on safe exchanges, brands they interact with, as well as how long they’ve been on the market.
These digital currencies are not inherently risky. This could not be further from the truth. The amount of improved safety that is the resultant feature of cryptocurrency security protocol has made them significantly more secure.
In principle, Blockchain ensures there is a traceable digital footprint for every transaction. Which means you cannot obscure point of origin or destination of any of the money put into the chain. What this points to is the fact that money laundering has become close to impossible.
Most of the reputable Cryptocurrency companies on the market today are also self-regulating. Which means that they carry out independent audits of all the purchase points to ensure none of their customers intends to use these digital currencies to launder or engage in any illegal activity.
Vulnerability to Cyber Attacks
As with any transaction done online, there is always the risk of cyber-attacks. Cryptocurrencies have been victims of the same in the very recent past. The more people buy into the idea of digital-transaction as a way to do business, the more criminals also try to find a way to capitalize on this new technology, it’s inevitable. This doesn’t make it inherently risky, it just means there is a need to better secure the network.
Fortunately, there is a simple way to get around the risk of cyber-attack, and that is by storing your key details on an external drive. Pretty free and clear. The idea behind this is to only use your information when doing actual trading, after which you should disconnect. This reduces the chances of someone accessing your key-in data as it won’t be stored online.
Cryptocurrencies are a legitimate way to transfer value, and with all the extra steps taken to secure the network, these currencies have now become a great way to invest. But only if you, as the buyer, evaluate the network and make informed decisions.
Most of the risks involved can be mitigated, and with self-regulation and modern policy formulations, it’s safe to say that these concerns are fast becoming a thing of the past.