Since the introduction of Bitcoin in January of 2009, cryptocurrency has been on the rise. Technology is the future and a major chunk of people living in this world have already realized that. An example of this is a rise of online betting sites, through which you can take part in Belgium sports betting while sitting at home, anywhere in the world. Everything is becoming digital and so is money, in the form of cryptocurrency. Cryptocurrency promises to revolutionize the way we used to manage our financial resources.
Crypto allows you to have a greater control on your financial assets, as compared to traditional banks that do not give the people the freedom to keep an eye on their money. With every passing day, more and more people are learning about cryptocurrency so they can catch-up with this revolution.
Although the rate of Cryptocurrency production is increasing, the chances of scamming are also getting higher. The volatility of the Crypto investment can make you lose all of your money within the blink of an eye. Additionally, the mining of these coins demands a high energy setup, causing damage to the environment.
For those interested to find out more about Cryptocurrency, we have jotted down a list of 3 things that you must be aware of before getting into it.
1. Over 12,000 different Cryptocurrencies are available
One of the most astonishing facts of cryptocurrency is the high variety of options available within this sector within the timespan of just over a decade. Billionaires, such as Elon Musk and Changpeng Zhaou, are investing billions in the crypto industry already. With the release of every new coin, the investment opportunities are getting diverse and people are readily accepting this new reality.
This large number of cryptocurrencies, increasing every passing day, makes it easier for scammers to succeed in this sector as well. However, there are various educational platforms present including Investopedia and DeFi that can provide you with enough information to stay cognizant of these scams at all times.
2. High risk trade may empty your bank account within seconds
Speculation can be a disease when dealing with crypto. You need to have a certain control on your thinking process when investing in crypto. The possibility of losing the investment must be embraced at all times. You should make a plan and follow that initial plan, instead of getting greedy and updating your plan from time to time.
You should never put all your eggs in one basket, this idiom is very relatable in cryptocurrency investment. Bitcoin has time and again faced major crashes and even lost its value by 99% in just one day, in the month of June in 2011. Similarly, the value of Bitcoin dropped over 80% between the years of 2017 and 2018.
The arrival of Covid-19 also led to the drop of 50% in BTC value. These cryptocurrencies are very volatile and various global phenomena can affect their value. Sometimes, even a tweet from a billionaire can add or drop the value of any coin.
3. Crypto mining destroys the environment
Crypto mining requires a great amount of electricity and a powerful computer network. The more powerful your equipment is, the more valuable coins you can mine. Consequently, more GHGs will be produced, adding to global warming.
The tech gear used to mine bitcoin requires a great deal of energy. A study by Cambridge University researchers on the amount of energy used by Bitcoin revealed that it uses as much energy as the entire population of Norway. The production of Ethereum, however, does not require a great amount of energy as the miners have to put their own tokens on stake to earn their fair share.
Although the recently launched coins do not require energy as high as BTC, crypto is still capable of hindering the idea of a green environment.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.