There really is no such thing as a safe investment. Even something as traditional as buying property could see a crash and a loss of investment.
Yet, many people are very bullish on buying cryptocoins. Some like the upside as new coins are put up and gain value quickly. Others have bought into the blockchain technology as the future of the internet and see an investment now being a smart move.
Then there is the question of the security of the currency themselves. Can they be easily stolen?
To help you decide if cryptocurrency is for you, let’s take a look at some common questions people have about them.
Can My Cryptocurrency Get Stolen?
It is definitely possible for cryptocurrency to get stolen. These breaches are rare in which crypto gets stolen, but the nature of cryptocurrency makes it a great news story when it does happen, says BruteBrothers, who offer crypto wallet recovery services.
The only time that a cryptocurrency can get hacked and stolen is during the exchange. This is when the currency leaves the blockchain and is sent to an exchange on the traditional internet. This is the weak link and is prone to vulnerabilities. If you have a digital wallet where your currency is being kept then it is also vulnerable there.
There have been some advances in the security of how a Bitcoin wallet works, so it is more secure there.
The most secure way to keep your cryptocurrency is to save it to a cold wallet, says Fool.com. In other words the wallet is a hard drive like a type of USB that is not online (more info). Once you have bought the coin, then put it in your cold wallet instead of keeping it on a wallet hosted by the exchange. Yes, it adds a layer of complexity to buying and selling quickly, but it gives you more security than anything else.
Are Cryptocurrency Volatile?
These coins are mainly stable and see decent growth making them good investments. They are not tied into many other financial markets, though, so they are hard to predict. Usually a dip happens when there is news regarding some shortcomings in blockchain technology.
There is a lot of promise with regards to using the blockchain so when it shows signs of not living up to that promise, the coins generally lose some value.
There are so many coins that it is hard to say if they are stable or not. The big ones like Bitcoin and Ethereum usually grow steadily and don’t see too many crashes (Aside from the big one recently!)
The key here is to evaluate each coin on the basis of what it delivers. Many of these coins are not just for people to speculate with. They have a specific function on the blockchain.
As an example, the coin POE is used to create a record of ownership of digital goods so owners’ can be tracked down and given credit or royalties. Since these transactions all cost money to register, coins are used. The bigger a platform becomes the more valuable the coin. Look for platforms that solve problems and you will likely find a coin worth investing in.