When investing in cryptocurrencies or on the stock market, there are always risks involved. In order to be successful at it, of course, you need luck but you also need some skills, knowledge, and patience. You need to understand how this technology works first. Of course, you should also be very focused careful. In order to help you and protect you, we put up a list of the most common issues and risks that occur when investing.
Losing Your Private Key
As you know cryptocurrencies are all stored in a digital wallet. The digital wallet can be used and controlled by the person who owns the private and the public key. Both of these keys are unique and cannot be copied or used by other people. This is great for protection and safety but there is one problem too. Imagine losing your private key or destroying it unintentionally, you won’t be able to access the cryptocurrencies stored on your digital wallet. Also if your private key is stolen and falls in the hands of somebody else, they can easily gain access to your cryptocurrencies.
Trading platforms are working hard to protect themselves from hacking and many other malicious activities. They are the most vulnerable entities that can be breached. Only in 2016 more than $70 million worth of bitcoins were stolen which led to a stunning 20% drop in price. Many events like this happened in the following years so you need to keep this in mind that it could happen again.
Regulators are trying hard to find common ground in order to totally control and regulate cryptocurrencies. The problem is that they are inconsistent. Most of them are worried that bitcoin and other currencies are used in order to do crimes so this is their main reason why they want to control them.
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