Cryptocurrencies have forever changed the way we think about personal finance and doing business. For many years, they cause controversy, are criticized, generate crime, are accompanied by failures, and provide an opportunity to earn good money.
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Despite its many advantages, digital money has some disadvantages. Naturally, they are common to all financial markets, but in the case of using cryptocurrencies, the risks are doubled due to their specific features. So, what are the main threats to those who have chosen bitcoin or other cryptocurrencies as a tool for investment?
The first malicious apps were created at the time of the emergence of electronic payment systems (WebMoney, PayPal, etc.). Now their analogs are adapted to the cryptocurrency market and can be activated wherever such an opportunity arises. The most common methods of theft amount of crypto coins are:
– ransomware programs;
– fake links (substitution);
– phishing (unauthorized access to personal information).
Owners of digital money should be extremely vigilant and try to stay one step ahead of malware-check all addresses and not click on suspicious links, use antivirus protection and, of course, use a high-quality VPN that guarantees reliable protection for traders. Go here to read the ExpressVPN expert review and learn more about how privacidadenlared technology works.
Cyberattacks are the second-largest problem and a frequent occurrence in the world of developing cryptocurrencies. Cases of hacker attacks are observed more often, and the methods of fraud are becoming more sophisticated. Bitcoin wallets and large amounts of money that are traded on trading platforms have become particularly attractive for thieves. Cryptocurrency exchanges were repeatedly hacked, as a result of which many were closed due to bankruptcy.
The Securities and Exchange Commission has confirmed that more than half of the platforms have faced cyber-attacks. For example, in 2016, due to an error in the code, hackers gained unauthorized access to the digital wallets of participants of the DAO hedge fund and stole more than $150 million. Another well-known case: when hackers bypassed the security system and changed the methods of verifying users on the well-known Bitfinex exchange-then they stole $70 million.
According to experts, the problem of security in the world of cryptocurrencies will “hang over the heads” of investors for a long time.
The bankruptcy of stock exchanges.
Over the previous 105 years, about half of all existing cryptocurrency exchanges were closed, including quite promising ones.
At the time of the closing of the sites, users did not have time to withdraw money from their accounts, which led to multimillion-dollar losses. And the reason for this was not always hacker attacks.
Technical failures in the operation of sites where bitcoin wallets are stored are quite common. Investors who have suffered losses cannot claim a refund, regardless of whether the problem is caused by malicious actions of hackers or the negligence of the operator in the development of the software.
The collapse of the virtual money market.
Today, when bitcoin is worth more than $ 50,000, this problem seems unrealistic. However, no one can guarantee the success and longevity of cryptocurrencies. On the one hand, they are accepted on a par with fiat money, and the other-are not subject to any control. They are not material, like the dollar or the euro, but there is a prospect that soon they can be withdrawn through an ATM and put in your pocket, like ordinary money. However, so far they exist only in virtual form and are used much less often than fiat currencies.
The value of digital coins naturally changes over time, but there is no guarantee that rapid growth at a certain point will not turn into an equally rapid decline (pullback). Therefore, there is a probability of a return to “zero” in both the short and long term. Prices are volatile (which is confirmed by high volatility) and a decline in the exchange rate can provoke almost any political or economic factor. And such events, as a rule, are very difficult to predict.
Loss of the secret code.
This is the key to access the bitcoin wallet. The loss of the code implies the loss of all assets that are stored in the wallet. This can happen if the PC hard drive fails or the USB flash drive on which the code is written is damaged. According to statistics, this happens in 25% of owners of crypto-wallets, who lost about $18 billion. It is impossible to restore the code and return the money.
The erroneous transaction.
An error when entering a code with just one digit or sending it to the wrong address also leads to losses. The transaction cannot be canceled, so the amount sent cannot be refunded.
Cryptocurrency is unstable, not regulated by anyone, does not guarantee investor protection, is subject to extreme volatility, and is extremely attractive to scammers.
The prospects for virtual earnings can be as airy as the currency itself. Therefore, everyone who invests in bitcoin or carries out transactions with cryptocurrencies must first consider the risks in order to take the necessary measures. Only a comprehensive approach will help you effectively protect your funds.