“Is cryptocurrency safe?” This question has piqued the interest of several hundreds of individuals, especially those looking to join the trend in handling crypto. Of course, no one would want to plow the sand by entering into something unprofitable. However, some individuals are content knowing that there is a chance that their virtual investment looks up.
Whichever category you fall into, this article will prove helpful to you. We will consider what makes cryptocurrency seemingly unsafe and discover the answer to the question “Is cryptocurrency safe?” To do this, let us delve into some renowned features of cryptocurrencies.
Since the launch of its first kind in 2009, multiple studies and observations have been made by various individuals and groups. From this, the following have been noted as key features of Cryptocurrency.
Every transaction done in cryptocurrency is shielded by several layers of modern encryption tech. Encryption is present in every step of what goes on with Cryptocurrencies. For example, to complete any transaction, a wallet holder with his private key transfers money to another wallet in encrypted form.
From there, the recipient decrypts the code using a private key unique to him. With the public-private key encryption of Cryptocurrencies, individuals cannot spend multiple copies of their currency. In other words, the money spent or sent from an account is subtracted from the account and cannot be re-spent, as is the case with fiat currency in bank accounts. The public-private key feature is the main reason why transactions are rendered irreversible.
Security and anonymity go hand-in-hand in the world of cryptocurrency. Every transaction completed with these virtual currencies carries no ID of the individual or groups involved in the transaction. Aside from the public key, which functions like your account number, every party involved is anonymous. However, each wallet holder is advised to strengthen device security with layers of encryption to prevent issues of stolen money.
Cryptocurrencies do not have a central body that regulates and supervises the flow, value, and other details of this virtual money. This helps to prevent disruption in trade in the advent of hacking attempts considering how data of transactions are stored individually by currency owners.
The value of Cryptocurrencies is dependent on their demand and supply rates. This is a major reason why a Cryptocurrency could be equivalent to thousands of dollars one minute and experience a fatal dip the next.
Cryptocurrencies have been declared illegal in certain regions/countries. However, in other places, it is either declared legal or there are no laws in place to restrict its existence and use. No doubt, using these currencies in countries where they are not accepted would warrant problems.
As a non-legal tender, Cryptocurrencies do not have supervisory bodies like the government over them. Although this translates to restriction-free and billing-free transactions, it equally relieves owners of these Cryptocurrencies from any form of financial insurance from these legal authorities.
Not all of its features are stellar. Some of its features make individuals want to steer clear of this virtual currency, while for others, the good factors are enough to string them in. However, if you are looking to go into this P2P trading for whatever reason there is, knowing these features lets you know what to expect.
You would also have to consider the legality of Cryptocurrency in the region you reside in. This is because not every government supports the use of non-legal tender in their territory. But without a doubt, you would not be lacking security-wise, considering how most top Cryptocurrencies have good security measures in place. With the provision that you include security measures to whatever device you are operating your wallet from, you can rest assured in that aspect when trading cryptocurrency.