As tempting as it may seem. Wait and read this before you buy your first crypto coin. I know Dogecoin is the hip kid on the block, but that doesn’t mean it’s an excellent investment. The creators of Dogecoin still don’t take it seriously and still consider it a meme coin, and before you go all “but Elon freaking musk” has been rallying behind it. Yes, I know Elon Freaking Musk is crazy over it and is even accepting it as a mode of payment for one of his launches but, that doesn’t mean you shouldn’t know what you’re getting yourself into, because just as much as Crypto can make you a millionaire, it can also make you go broke.
Basics of crypto currency
Perhaps the biggest red flag that Crypto raises is that it possibly cannot be controlled or regulated. If you’re locked out of your Bank Account in your country because you forgot your password, you can simply call up their customer service desk and get them to reset it. But if the same situation occurs with your Crypto account. Your Coins are lost forever, no one can help you recover them unless you hack them open. But if that too does not work, that money is lost forever. One man from San Francisco who technically is supposed to be a millionaire thanks we have kept away to Bitcoin from his millions because he lost the password to a hard drive that has the keys to his Bitcoin wallet.
The Hard Drive has 7,002 Bitcoins, and at the time it was reportedly worth about $250 million. He can call no one to help him recover the bitcoins. It is practically impossible for anyone working at Bitcoin to recover them for him. His only shot is to hack it open. What’s even worse is that Ironkey, the software used to Encrypt the Hard Drive, allows up to 10 attempts to its users before it locks the contents forever, and Thomas has used 8 of them. So Thomas is essentially a millionaire without access to his millions. There are dozens of people facing the same fate as Thomas, and many more facing a distinct set of issues. Therefore, it is imperative to be aware of the nuances of Crypto.
How crypto currency works?
The basic underlying principle on which Cryptocurrency works is a distributed public ledger called the blockchain. In all records of any transactions are held and processed by the currency holders & those who mine them. Blockchain in short is a decentralized form of computing & recording information. Which makes the hacking, stealing, or altering of information close to impossible. As any transaction in Crypto will be processed through a vast network of computers, and changing the values in any one computer will not yield any result. As the other computers on the same network will cancel that change out. Furthermore, the number of computers that this is spread over is large enough to make it impossible to change the information in all of them at the same time for the action to take effect.
Crypto and how it’s used for criminal activities
Because Crypto cannot be controlled or regulated, someone can literally use it for anything and everything with no tracing. It’s an even better solution than swiss banks. We can use it for terrorism, money laundering & pretty much anything without being traced. When the “Wanna cry” virus attacked computers. The hackers asked for a ransom in bitcoin to avoid being traced.
Crypto does not have or hold any tangible value
For all the same reasons mentioned above, Crypto in many regards functions just like stocks. It has no fixed tangible value. Its value can change any second, minute, or day. It does not have any defined purchasing power in any nation, location, or website. When you’re in a store shopping, one coin of a particular cryptocurrency might buy you a brand new PS5, but by the time you head to the billing counter, it now might just be able to get you a PS5 controller. Most Cryptocurrencies are not backed by any physical commodities or gold, and their value is determined simply by speculative interest. So go by what most crypto investors say “invest only how much you can truly afford to lose.”
Check if your country has banned crypto currency
Though in the past few years, most legislations have eased laws related to the trading of Cryptocurrency. There remain nations that have explicitly prohibited the exchange, holding off, or selling of any form of Cryptocurrency due to fear of it being used in criminal activities. It is always advisable to check your nation’s laws regarding the same before you buy that first coin.
Invest in upcoming coins
If you’re looking to make a huge return on a small investment or are looking for your crypto investments to blow up like Bitcoin, don’t invest in Bitcoin or Ethereum, they’ve already blown up. Investing in upcoming coins is your best shot at getting that amazing return. Only invest in the established Coins like Bitcoin or Ethereum if you have a lot to invest and can afford to lose that investment, as critics are looking at a Crypto Winter coming soon. So yes, while investing in Bitcoin or Dogecoin is not a completely bad idea, investing without knowing the basics and especially investing just because Elon Freaking Musk told you to is an awful idea. Keep in mind when he told everyone to use Signal, its stock went up. But its founder took the app seriously. Dogecoin is a unique case. Know what you invest in, do your research, and at the bare minimum if you’re investing in any Cryptocurrency at least know a little about the risks, rewards, and its nuances. You should always try to make millions, but always make sure you don’t go broke.
– Aditya Drolia