Crytpo-Currencies — Are they worth the risk?
Everything we do comes with risks. It is our job to determine if the rewards outweigh the risks. This is the same philosophy when it comes to digital currencies, like bitcoin or monero.
However, the concept of a digital currency is rather new, therefore, our society is still experiencing the learning curve. Although there are benefits of the digital currency, which will be discussed in another blog post, first we want to discuss the risks. Why? Because if we only give the benefits, without listing the top risks, it could prematurely sway individuals into investing into bitcoins, or any other form of digital currencies.
Safeguarding Risks
Digital currencies can be stored at various repositories, or through a digital wallet. Either way, it will need to be safeguarded. Therefore, you’re either trusting a repository to keep your digital funds secure, or you must take measures to ensure the security of your digital wallet.
Inconsistent Pricing
Similar to the stock market, the price of bitcoin is based on supply and demand. Buyers want to buy low, while sellers want to sell high.
Not Backed by FDIC
This is risky for a few different reasons. First, the price fluctuates, similar to the stock market — so as the pricing valuation changes you could easily lose money. Also, if someone breaches your wallet, or the repository and steals your bitcoin, it is gone. You cannot legally go after the repository or wallet creator for lost funds.
One Typo Creates Major Problems
Better triple check that address! Once it’s sent, there’s no turning back. This is pretty self-explanatory. Simply put — triple check the address you’re sending the funds to!
Poor PC Hygiene May Lead to Significant Loss
If you store your own digital currencies, how often do you back up your hard drive? Why does it matter? If your system crashes, your funds will be gone. Even some malware is designed to steal your wallet and your funds, therefore using a security solution that deploys an application whitelisting is highly recommended.
