Cryptocurrencies . 27 Jul 2021

Cryptocurrencies Are Not What You Think.

by Blockonomist Editorial
Cryptocurrencies Are Not What You Think.
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Digital assets have become a global phenomenon in recent years, and technology is evolving like anything. If you see the latest crypto trend, you’ll find that their adoption rate is increasing since 2013.

As depicted in the graph below, crypto-assets (including crypto tokens and stablecoins) show an upward trend for a few years.

Cryptocurrencies are gaining popularity because they have their applications in making payments for goods and services. Other than that, cryptos can be used to access personal finance, smart contracts and the internet of things. The launch of stable coins has increased crypto adoption due to the fact that they trade just like fiat currencies.

You indeed are well aware of the benefits of cryptocurrencies, but do you know what the darker side of cryptocurrencies is? Yes, it is pretty much right that digital asset enables the users with faster transactions and reduced fee and they also improve the financial inclusion for unbanked people. But, shadow will always be there if there is some light.

We can’t neglect the shadowed region of cryptocurrencies as well. To start with, we can say that cryptocurrencies are not regulated by the government. Indeed it is an advantage because it can maintain anonymity for individuals. But, this feature of digital assets can also help the terrorists and criminals for their notorious activity. Do you want to know how? It’s pretty simple. Cryptocurrencies maintain anonymity, and the criminal group can use this property for making their trades and payments and that too, without being caught.

No doubt that cryptos have found their use in legitimate transactions, but on the other hand, their use in illicit activities can also not be neglected. According to the chainalysis 2020 crime report, cryptos worth around $10 billion were involved in illicit activities. And those illegal activities included their use in terrorism, drug abuse, ransomware, domestic extremism and other scams.

We all are aware that cryptocurrencies are volatile, and hence, there is always a risk while investing in digital assets. Regardless of the market volatility, there are some risks that are involved during the transactions.

What common scams can you encounter while investing in cryptocurrencies?

Scams are indeed an integral part of the internet world, and crypto transactions are also not left behind. Here are two significant scams which you might encounter while making some crypto transactions:

Imposter websites- If you don’t know what an imposter website is, let me tell you that it is a website that is not original but resembles the original website. In simple words, it is just a copy of some website. Suppose you follow some website, and when you visit that website, you are actually directed to an imposter website that looks similar to the original one. Now, when you make payment to such a website, you are actually transferring your funds to a fake URL.

Scam Emails- Many of you must be receiving email updates from various crypto companies regarding investment decisions and updates. Now, you might receive some fraud emails which look exactly similar to what you receive from a legitimate company. You can get scammed by a fake Initial Coin Offering. I’m not saying that you start looking at every email in suspicion, but make sure that email looks legitimate to you with exact logo and branding details before making any investments.

The risks involved with the digital assets are why cryptocurrencies are considered a threat by law enforcement and security organizations. Needless to say, cryptocurrencies hold huge potential with them, but they are actually not what you think. We suggest you be more careful with your investments and do proper risk management before investing in digital assets.