6 Drawbacks of Cryptocurrency and How You Can Work Around It

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Tuesday, August 31, 2021 / 09:30 AM / Sponsored post by Joe Johnston / Image Header Credit: india.com



You might have noticed how cryptocurrency has become popular over the past few years, and more people have started to invest in it. Truth is, cryptocurrency is not new to the market. It has been around for many years now, and it has kept growing ever since. People who invested in cryptocurrency back when it was first introduced might already be sitting on a fortune today. Cryptocurrency indeed has tons of benefits and advantages, but that is not always the case. It also has some drawbacks that can affect the flow of your investments. In this article, we will show some of these drawbacks and ways you can work around them if you decide to start an investment


 

Cryptocurrency Has a High Volatility

One of the drawbacks of cryptocurrency is its price has high volatility, which many people also consider as a significant issue. Because of this, some people do not consider cryptocurrency as a tangible investment. On the other hand, there are still many investors who see the indefinite value of cryptocurrency as a minor setback and don't let it affect their decision in investing in cryptocurrency. The timing of cryptocurrency investment can play a role in terms of how much you achieve. Analysing how it behaves in the digital market can help you gain an upper hand. 



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Limited Acceptance

Even though cryptocurrency has been accepted by many people since its release, the number of places where it can be used as a mode of payment to exchange goods and services are still very limited. If you are someone who is yet to enter the cryptocurrency market, this might make you think that cryptocurrency is still worth it. Still, considering how the technology is evolving rapidly, experts believe it's only a matter of time before cryptocurrency can be widely accepted in the digital market. It's not long until it becomes normal and accepted by many people.


 

Cryptocurrency is Unregulated

Cryptocurrency runs on a technology called a blockchain. No one has complete control over it, which also means that no one regulates it from time to time. Although cryptocurrency has an impressive security feature, what's susceptible to a privacy breach is the exchange from one user to another. Platforms can also be subject to data leakage since some of them store the wallet data of their users. 


 

Vulnerable to Hacks

Like what we have mentioned above, cryptocurrency is unregulated by anyone, and some platforms are not completely secure. This means that hackers can easily manipulate their platform's security and take control over a user's data. After gaining access to a user's data, hackers can easily take all of the funds they want. There have been reports in the past that several exchanges' security has been breached by hackers, giving them thousands of US dollars. 


 

A Data Breach Can Result in a Financial Loss

This could probably be one of the major setbacks that could happen. That is why when you start to invest in cryptocurrency, choose a good platform with good security as one of its features. Data protection could make it safer for investors to put more money into cryptocurrencies. If there are fewer risks of a data breach, there could be a potential increase in more users accepting cryptocurrency. 


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Cryptocurrency Supply Might be Endless

Back when cryptocurrency was first introduced to the digital market, there were only limited types of cryptocurrencies that people were aware of, with Bitcoin being the most popular. Today, there are hundreds of different cryptocurrencies, and this has only happened over the past few years. Imagine how many more types will be introduced in the market again in the future. If this is to happen, the cryptocurrencies that were introduced in the past might soon be irrelevant to others, and it could affect the investments of other users.


 

Educate and Familiarise Yourself with Cryptocurrency

There's no better way of handling cryptocurrency than educating yourself about it. If you have enough knowledge about it and analysing what happens with cryptocurrency daily can help you decide which approach you should take towards crypto. There is always a risk when there is a profit involved, and you mustn't overlook these potential setbacks when it comes to cryptocurrency. 

 

Investing or trading in cryptocurrency is entirely up to an individual's decision. Cryptocurrency has tons of advantages that could result in an upper hand, but some disadvantages come with it. Take note, these setbacks are not guaranteed to happen, but there's always a possibility that they will.


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