From fluctuation to fraud, is the investment in the cryptocurrency only fraught with risks?

Following the profit of 450 % Bitcoin ((BTC -1.44 %)) It has been registered since late 2022, as it is not an extension that many investors kick themselves because of the lack of purchase (literally and metaphorically) the movement of encrypted currency. Even without understanding what they deserve or how they are estimated, it is clear that a few Digital currencies.

Just do not overcome yourself much if you are one of the millions of people you missed. You hear about the big victories, but you do not hear about all horror stories or the risk of fermentation.

Unfortunately for some, it works as intended

It is clear that the idea of ​​encryption and basic technology has its advantages. Most cash transactions are actually numbered in one form or another. Blockchain inherent in Crypto – A CodedThe digital professor’s book, who records and provides his own transfer operations – only avoids the need for a central clearing house to facilitate these purchases. Such weddings can theory eliminate fraudulent transactions using traditional currency.

However, Blockchain technology from Crypto does not already eliminate fraud. If there is anything, the nature of the encryption makes it easy to deceive a reassuring person: there is no central clearing platform for examining and verifying the legitimacy of both parties in the treatment. If there is nothing else, or a bank or a credit card The network can at least do so a lot.

And yes, many people are fraudulent of their encryption assets. As is a lie Motley Search arm reports at homeDuring the first three quarters of last year, the fraudsters stole one billion dollars of the cryptocurrency from the American population who believed that their origins were safe from digital theft. As it turned out, the Blockchain design works so well that there is no way to get encrypted to stand by simply removed from a digital portfolio. Often, the recipient used a fake identity, and therefore it is impossible to track it.

This certainly does not reinforce the argument that the world is better off by working around the third -party payment brokers and the central managers managed by the Central Bank, even if most of the encryption owners are never deceived.

Perhaps the strongest argument against jumping on the cryptocurrency, however, is the inability to predict.

To be two things means that it is not great in either of them

Bitcoin’s severe fluctuations have certainly worked almost exclusively. This is not the only one. ethereum ((Eth 0.67 %)) and Xrp ((Xrp 0.45 %)) It is also large, along with a group of other digital currencies.

When they were asked exactly the reason for their willingness to pay a high price in these encrypted currencies, most buyers are struggling to express an answer. They provide responses, certainly – not only answers to questions like “Why is Bitcoin the value of more than $ 90,000 at the present time?”

Few investors can specifically explain the reason why bitcoin value in the foreseeable future as well. Yes, it is an alternative to the US dollar that weakens the value. However, the Central Bank in the country can work at least to confirm its value.

With any encrypted currency, in contrast to that, its value is still completely arbitrary – which only reflects the perceptions of the parties interested at the time. There is no transparency or explanation about this evaluation process.

Now connect the points to discover the correct defect here. That is, the thing that makes Bitcoin such an investment a convincing growth is also what makes it a poor currency, and vice versa.

Think about the matter: currencies of any kind – if there is nothing else – it is supposed to be stable even if their basic economies and inflation find that the money is buying less. If the value of the currency is not somewhat unexpected, it will be difficult to use it as a way to buy goods and services, and undermine their benefit and subsequent value. At the same time, it also becomes an undesirable way Pricing Goods and services, and the economy and bibli may actually exacerbate.

In this context, the fact that bitcoin and other encryption in US dollars only does not confirm the argument that it is not actual currencies. In order to be the real currencies to store the value that is described as it will need to stand alone as a pricing method instead of expressing it in US dollars always.

However, one of the main principles of investing in stocks (, bonds, goods, or any other assets) or just sitting on the currency is scarcity. The assets have the value and keep it because it is present in the limited offer, and/or the world wants and/or wants it.

This is not the case with encrypted currencies. Although there is a file Limited To the number of bitcoins that will be created at all, there is no limit to the number of other cryptocurrencies that can be digitally minimal – and may compete with bitcoin. It is a problem simply because any encryption keeps value, it should be the only currency that can be used in a specific market.

The smartest alternative is still …

This is a complex issue. This is part of the point. Complex buildings are simply more dangerous because there are always actors that will benefit from this complexity – and subsequent confusion – in their favor, and your wipe. Current currencies are no exception.

But what is the alternative? Although the traditional stock market may be sometimes, it is not complicated. There is transparency, control. There is a real scarcity, clarity. There is also a long history that suggests more or the least that the stock should be deserved at the present time, and what it might deserve in the future. The cryptocurrency does not offer anything in a measurable or meaningful way.