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Basic Questions about Cryptos / Re: What are common risks involved in crypto?
« on: March 07, 2023, 11:48:32 AM »
Cryptos are volatile - There have been many instances when we have witnessed sudden movements in the crypto market. Even the most popular 'Bitcoin' fell from $61,837 in Oct 2021 to $20,108 in June 2022.
No central authority - Though decentralization is the root cause of the emergence of Crypto coins, it can be the biggest threat to its future.
Government taxes or sudden bans - There is a high risk of the government imposing hefty taxes on crypto trade or even banning it in their country to safeguard the centralized banking system.
Losing Private Key - It is always recommended to note down the private keys and keep them somewhere secure but what if the keys are lost? There is no way one can recover their private key.
Irreversible transaction - Once a transaction is done, it can never be reversed. We are humans and we make mistakes but in the crypto world, a mistake can cost us a lifetime of wealth.
No central authority - Though decentralization is the root cause of the emergence of Crypto coins, it can be the biggest threat to its future.
Government taxes or sudden bans - There is a high risk of the government imposing hefty taxes on crypto trade or even banning it in their country to safeguard the centralized banking system.
Losing Private Key - It is always recommended to note down the private keys and keep them somewhere secure but what if the keys are lost? There is no way one can recover their private key.
Irreversible transaction - Once a transaction is done, it can never be reversed. We are humans and we make mistakes but in the crypto world, a mistake can cost us a lifetime of wealth.