Invest in cryptomoedas? You must have heard about the positive points and possibilities of gains, but have you informed about the risks of investing in bitcoin? Not all sites and contents are willing to show the other side of the currency, but it is important to be aware of the risks of this kind of investment.
This article will bring a sincere and realistic analysis about the currency, we present the main risks of investing in bitcoin.
Investing in cryptomoins
Absence of a centralized command
Currently, there is no authority or institution that regulates investment rules and other important points regarding bitcoin. Bringing to a simpler context, there is no institution like the Central Bank for digital currencies. In a way, this may seem interesting, since decisions are taken collectively. But what if it stops happening?
Disagreements can occur at any time and the absence of a regulatory institution can be missed. The decision making ends up being damaged, which can cause a currency instability.
Lack of rules and legislation
In Europe it has not yet proposed any kind of regulation to bitcoin investments. Much of this is due to a certain informality transmitted by the way cryptomorph investments are conducted, especially under the idea that it is simply creating a bubble of speculation.
This non-identification of relevance on behalf of the authorities results in the absence of regulation, which leaves the environment unsafe, with the currency not developing and increases the risks of investing in bitcoin. Although at first sight everything works well, in certain situations it can be risky not to have anyone regulating this type of activity.
The bitcoin universe has its own characteristics, which include issues such as the number of currencies available for trading in the market, and other important issues. Without a regulatory institution, this information and definitions about the currency are subject to change at any time.
A recent event works as a good example of this type of risk. There is a limitation of 21 million currencies in the world. It is precisely this number that makes the supply smaller than the demand, that is, it allows this great valuation of bitcoin. The point is that it was suggested to increase this number, to better distribute the currencies and reduce the concentration of amounts, which caused dissatisfaction of those who have bitcoins.
Possibilities of attacks
The bitcoin is protected by a system that has proven efficient, the blockchain. Until then, no successful attack on the system itself has ever been recorded, which would affect millions of investors. But, as we know, hackers are as skilled as those who develop the protection systems. What if one day an attack of this kind were effective?
The question is that without an institution that regulates and controls bitcoin, investors who would lose their cryptomeda quotas in case of some hacker attack would be without support. It is precisely this uncertainty that acts against bitcoin. In addition, there are also digital wallets, which is where the coins are stored. These have already suffered attacks, which encourages the use of offline wallets.
Intervention by the Chinese government
China is a country known for its extensive restrictions, different from our culture. Among these restrictions is the Internet. The country has a powerful firewall, which controls access to various resources of the world’s computer network. The country’s main relationship with bitcoin today are the miners, i.e. those responsible for recording currency transactions.
These fundamental elements for the functioning of the currency network are concentrated in a large part of China, comprising 50% of the bitcoin miners in the world. What if, suddenly, the government of the country decided to intervene in the activities of these people? This is one of the real risks of investing in bitcoins and could cause trouble, in gigantic proportions, to all currency investors.
Emergence of new currencies
Not everyone knows, but bitcoin is a specific nomenclature for a type of cryptomeda. Just like in the stock market, a series of other currencies can appear at any time, which happens simply out of the blue, without any kind of ballast. In the same way that they appear, they can disappear. Imagine the situation of investing thousands of reais in bitcoin and it falls into disuse in a few years?
New coins often appear, with apparently high potentials, so, just like bitcoin, they remain within this speculative profile, bringing nothing new. In addition, other crypto currencies can also interfere with value, which makes the risks of investing in bitcoin even greater.
In the technological world everything is very dynamic and can change from one hour to another. Bitcoin suffers exactly this reflex when it comes to currency valuation. The volatility is very high, which exposes even more the risk of investing high values in this type of speculative market. Factors that contribute to this are, especially, the restricted quantity of currencies and the still limited use.
This issue is not a problem, but rather a risk. There are several stocks on the market that present these characteristics, with the onus being on the investor. However, there are possibilities of safer investments, which is different in cryptomens. Imagine always investing your savings in volatile stocks? It seems uninteresting, and that’s what happens with bitcoin.
The risks of investing in bitcoin are clear, which makes this perhaps not yet a valid option. To search stocks on the stock market, according to your investor profile, is the best way to have reliable and interesting incomes.