Since bitcoin is a popular digital currency, it involves high risk. Millions of people use bitcoin, and millions of transactions are performed on the blockchain every day. Many businesses are going with bitcoin payment that means they accept bitcoin as a primary payment method, and 1,60,000+ merchants use bitcoin as a payment method on their website or stores. It is also a popular form of investment because it is a deflation currency that means the value will increase in the future. So in this article, we will understand the risk involved in bitcoin digital currency.
The risk involved in bitcoin cryptocurrency
Risk for Losing coins: There are many exchanges available in the market since exchanges are centralized systems controlled by intermediaries or third parties, so the risk is involved. Hackers can hack the centralized system due to security issues because one party is working behind the exchange. If that central point gets cracked or hacked, it will affect all the exchanges. That means if all the bitcoins get lost, you will also lose your bitcoins. There are many bitcoin exchanges, but it is not true that all the bitcoin exchanges get the hack. Some exchanges provide high security.
Risk on Return on investment:
Why do we invest money in cryptocurrency? Right, we invest money to get a higher amount than invested but is there any surety you will get more money? Not sure? So there is no surety about Return on investment. If we invest money, there is a surety we will get profit or loss. It is also the risk involved in bitcoin and other cryptocurrencies. Bitcoin is a digital currency, and the value of bitcoin constantly fluctuates, and it purely depends upon the demand and supply of bitcoin. If the order is high, the price will increase, and if demand lows, prices will decrease.
Hacking Risk:
Bitcoin is a more popular coin than other coins in the market because it is difficult to mine, and there are few coins in the market, up to 21 million bitcoin. Since bitcoin is a popular digital currency, scammers and hackers sit to crack the security and find bugs to break the site or exchange. Many websites are not secured, and if you visit or give permission to your computer, they can release a virus to your computer or hack your private key or bitcoin wallet. So keep browsing safely and do not trust every bitcoin website or exchange.
Trading risk:
Trading is the most popular form of earning money, and some people do trading as a full-time profession because they become experts. There are high fluctuations in bitcoin value, and it all depends upon the demand and supply of bitcoins and other external factors. You check the price of bitcoin on Google, and after one-day checks again the price, there will be a significant amount, and these high fluctuations make trading riskier and riskier. You do not know whether the price of bitcoin will increase or decrease, but it depends on the factors. If you are doing one day trading (in most cases), you have to sell the bitcoin till market close, and if your purchase bitcoin at $48,060 and before closing the market price decrease to $47,060, then you have to sell at $47,060 that means you have lost $1000 that is too risky. But there are some applications on the Bitcoin Digital Official Site where you can improve your trading skills by practicing.
Risk on buying decisions:
Our buying decisions depend upon some factors, and the most significant factor is the media. Media influences our buying decision, and media is the only platform where there is some fake and genuine news mixed up and goes viral that impacts our buying decision. If you see the news or headline, “The price of bitcoin will touch $1,00,000 in the next five years,” it will immediately change your buying decision. It is also called FOMO (fear of missing out), which means you will invest your money in bitcoin, and if, unfortunately, the price starts decreasing, you will panic and your decision will change, and you promptly sell your bitcoin at a loss.
Conclusion
From the above information, we have learned that there is a high risk involved in bitcoin. So please take the right decision in this media era: risk losing coins in hacking, risk of intraday trading, and no surety of getting a return on investment because it is not a company producing products. It is just a digital currency that is just a payment mode. So the price or value of bitcoin depends on the demand and supply and external factors.
Hi there! I’m Sethu, your go-to guy for all things tech, travel, internet, movies, and business tips. I love sharing insights and stories that make life more interesting. Let’s explore the world together, one article at a time!
