It’s an incredible space full of innovation… but is cryptocurrency safe?
Cryptocurrency is a place of freedom, passion and escape. The foundations and morals of cryptocurrency have attracted a huge ecosystem of passionate individuals.
Everyday something new is happening. Perhaps its a new platform release, a new exchange starting up or even a government passing new regulations.
It’s not all sunshine and rainbows in crypto though. As a nascent industry, there are bound to be growing pains. Since there are large amounts of money involved crypto can be a particularly dangerous place.
With crypto in its current state, there are some risks that newcomers need to be aware of.
But don’t worry too much. If you are careful in crypto and you know what you are doing, you’ll be okay. We’ll walk you through the main risks and how to stay safe.
What is at risk in crypto?
When you’re involved with crypto the two main risk factors are money and personal data. The latter is usually of interest because it could provide malicious users illicit access to your money.
All money held as crypto could be at risk. This is dependent on a lot of things: what you’ve invested in, where you store your crypto, your account strength, what exchanges you use and more.
If you stay vigilant and maintain the best practices to keep your money safe, you should have no issues. However, as a beginner, this can be tricky. For example, picking the right exchange is important. You have to find a reliable exchange that will keep you safe.
If you own crypto, your personal data is of interest to malicious individuals.
Scammers and hackers want to collect your personal data so they can gain access to your funds and steal them. If you’re properly protected this can’t happen. We’re talking strong passwords and 2FA at a minimum.
Be aware that scammers often obtain email addresses and use them to send phishing emails that will steal personal data. Email addresses and passwords are of particular interest.
Are cryptocurrencies safe?
Yes… but also no.
Much like we have established that cryptocurrency is safe if you’re careful, the same can be said for any given crypto investment choice.
There are thousands of cryptos to choose from and you have to choose carefully. It can be really hard to find the best investments in such a big group of assets – but select your investments with care.
There have been numerous cryptocurrencies that have ‘exit scammed’, which means they took people’s money and ran away.
How to find the safe cryptocurrencies
Staying safe is the key to your success in this space. Finding safe, promising investments is a huge part of staying safe.
Investment due diligence is known as fundamental analysis and is not unique to crypto. Investors in every asset class complete extremely detailed due diligence of every asset they are considering investing in.
If you do your research into an asset, you’re more likely to find out whether it’s a good investment or not. You’ll see all the good, all the bad and you’ll understand where this asset fits compared to any competition.
By completing fundamental analysis, you’ll gain a bigger understanding of the asset you are considering investing in. This helps you weed out the scams and the fakes, instead finding the promising projects that could have a future.
No cryptocurrency investment is guaranteed – this space is highly volatile and unpredictable. However, ample investment due diligence will prevent you from starting with a failure.
Here is our detailed guide on how to complete fundamental analysis in crypto.