Despite digital advances and growing trust in the digital economy, one of the main myths around crypto is that they are unsafe, which is totally false because cryptocurrencies “per se“ are a security-based concept. Through blockchain technology, operations are traceable, transparent, secure and immutable. Now, several of these factors have to be aligned for the security principle to be met.
Although there are multiple characteristics to evaluate before opting for a crypto, it is not a titanic or impossible task and can be as simple as choosing an ice cream flavor.
In the first instance, users looking to buy these digital currencies should understand that these instruments fall within the denomination of “risk investment”, so it is recommended not to deposit more money than you are willing to lose. The bet has opportunities and risks, this point should be clear. And while there is no magic formula to know how much the value of the asset will grow or fall, the key is to investigate the project to invest and follow the most basic premise of business: buy low, wait and sell high.
In order to make the best decision it is important to be well informed. Information is power and the crypto world is no exception. The new scares, but the murky gives terror
Some people are wary of cryptocurrencies, particularly newly created ones. A simple way to detect if it’s a potential scam is that ‘if it’s too good to be true, it probably isn’t’.
Not everything is bitcoin and this currency is not the only opportunity to make an interesting investment. A new cryptocurrency with a good project, but above all that they have a solid team behind them, can give wonderful results.
The recent case of a cryptocurrency inspired by a series, and which ended up being a big scam, is just one example of what not to do, because while the furor over the series was a factor that generated trust and interest, the person or people behind the currency are anonymous and the project itself has no support whatsoever.
Distrust of the crypto world is based on three factors. First a bad publicity. Banks and governments mispublish cryptocurrencies because they can’t control them, at least today. Although they are in the process of regulating them.
The second is that they have hacked people and stolen their cryptocurrencies. But it is not that hackers have entered the blockchain, rather it was about users who have the coins on their cell phones and steal their cell phone or wallet password.
The third is that there have been major attacks on exchanges, but it’s the same case: hackers detect the site’s vulnerabilities, break into your system, and steal passwords.
Before making any decision, interested parties should thoroughly consult the white papers of the digital currency, that is, the documents that explain how it works, what are the objectives of the project, what benefits will be given in return, what is its value, among other aspects. It should also be investigated who is behind the cryptocurrency, whether the drivers are serious characters or companies.
It is the obligation of the investor to inquire, question, study and not be carried away by the experience or suggestions of other people. If the user is truly interested in the project, they can take the following steps. In this way you can drastically reduce the possibility of suffering a fraud or investing in a shit coin.
In short, an informed choice is key. It’s that simple.
Editor’s note:Gonzalo Araujo is CTO at R223. Follow it onLinkedIn. The opinions published in this column belong exclusively to the author.
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