These high risks are associated with crypto currencies
18. November 2018
Crypto currencies such as Bitcoin, Ethereum or Dash are very popular with both investors and consumers. Various countries heavily affected by sanctions, such as Venezuela, are even considering their own crypto currency in order to circumvent the usual payment systems.
While the basic idea of a payment system detached from banks seems reasonable in terms of competition, there are still many risks and problems. They arise above all because of the bank’s young history. Find out what still speaks against crypto currencies at the moment. It is also important to pick a reliable exchange, you can find most of them at http://www.Bestbitcoinexchange.net.
While Bitcoin has still increased by just under 1,400% since the end of 2013, the fluctuations are enormous for investors. From its high at the end of 2017, it has meanwhile lost over 70 % (15.11.2018). However, most Bitcoin optimists have just entered the market at very high prices. Since the actual value is unknown, no one can judge when it is really cheap or expensive. Today it is at least significantly cheaper than at the end of 2017. Crypto currencies are therefore not suitable as a long-term investment.
Lack of transparency
Often the publishers and their strategies are not known to consumers. Anonymity also attracts many criminals who use them for money laundering and other illegal business. It is therefore not surprising that they are particularly popular in Asia and countries with high corruption or for illegal business in Darknet.
High electricity consumption limits growth
Mining coins consumes a lot of electricity and is therefore not environmentally friendly. In comparison, mining Bitcoins consumes as much electricity in one year as is needed to supply the whole of Ireland. With an increase of the crypto currencies their growth becomes more and more expensive due to the power consumption. This prevents a high effectiveness and scalability. At least today a revolution is impossible for this reason alone.
This also results in a crash and total loss risk. Because the transactions have a capacity limit, which could make a sale impossible in the event of a crash.
Because of the risks, the EU, together with the G-20 countries, would like to try to introduce global regulation. But a ban in individual countries such as China could also lead to a sharp drop in demand. And which country wants to lose control over its capital flows? In addition, the ban would also block servers that are located in large numbers in China, of all places, which in turn would severely restrict capacity.
Since a Bitcoin is still very expensive and the digging of new coins consumes a lot of capacity and power, hackers often also use other computers to which they gain access via malware. In this way, the electricity costs are shifted to the victims.
But also the theft of Bitcoins is possible.
For example, a case became known in which Ukrainian hackers captured Bitcoins worth 50 million US dollars.
The loss of the private key can also lead to the loss of all Bitcoins.
For the mass use the crypto currencies are therefore hardly to be recommended.
No illusion lapsed
Whenever you hear of the possibility of getting rich quickly, you should be careful. Usually these investments are the biggest destroyers of capital. There is no quick way to wealth on the stock market. Even if you do everything right, it takes at least ten, 20 and more years until you have sustainably built up a fortune.