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When someone asks whether or not cryptocurrency is trustworthy the answer can be complicated. Yes, it does come with some associated security risks that need to be discussed before anyone attempts to trade. It’s still seen in some circles prone to volatility and it remains relatively unregulated. Unfortunately, there are scammers out there who will try to prey on unsuspecting victims. Thankfully, there are ways to know how to trust crypto and get involved without risk. Here’s how.
Is cryptocurrency considered to be safe?
When you compare it to stock and shares, or even Government bonds, investing in Crypto is risky. Across Europe and the USA, they’re considered legal but can be subject to shifting regulations and these are what can make the markets seem a bit more unstable or vulnerable to exploitation. It’s therefore important to find a well-regulated institutional cryptocurrency platform to trust in, and invest with so that if you’re just starting, you can get to know the markets safely.
Of course, it’s seen as volatile because in trading terms it’s a relative newcomer and investors are sometimes wary of it – and putting their faith in it. It has no real track record or historical proof that it works – and can sometimes be prone to huge price swings that reflect how investors feel at any one moment. Some cryptocurrencies are more prone to this than others. Bitcoin is still the safest option – even though that does still have some alarming swings from time to time.
Trust increases when you only buy what you can afford
When starting to invest and trying to work out if you trust crypto or not, one really important factor to mitigate risk is to not buy any more than you can afford to lose. Of course, there is still a chance that assets can plummet and change on any given trading day so making sure you have a diverse portfolio of investments – both digital and non-digital is key to making this work.
What security risks are associated with cryptocurrency?
At the moment there are only limited legal protections when it comes to using cryptocurrency – but that’s not to say you shouldn’t trust it. It’s worth pointing out though that if you’re using traditional methods to pay for goods and services such as credit or debit cards – you get security features that mean in the event of fraud being committed you’re protected. At the moment, crypto investments are safe – but if you lose money to a scammer there might be less legal protection or the ability to pay you back.
Scams happen – and you might already have faced one. There aren’t many people who haven’t been targeted with the email about a ‘threat to reveal compromising photos of you if you don’t pay a certain amount in Bitcoin’.
However, if someone is asking you to pay them in crypto and refusing other types of payment, then they might be attempting to steal your money.
What’s the secure way to buy cryptocurrency?
When working out whether to trust cryptocurrency it’s a good idea to know which is the most secure way to purchase it. As it’s risen in popularity there are now more online marketplaces where users can buy and sell.
Safer online platforms will always ask you to give proof of your identity. Good sellers will assiduously follow Know Your Customer (KYC) and Anti Money Laundering (AML) guidelines to make sure they’re playing fair and safe.
To ensure the trust is built up – if you’re a first-time trader or investor choose a platform like Coinbase which requires all its customers to verify any information they give before they’re allowed to trade.
Only ever use platforms that take security seriously and take adequate and extra steps to verify the identity of everyone who uses their platform.
How do you store crypto safely?
For maximum trust, always keep your crypto offline – and away from anyone who might be able to get an internet connection to steal it from you.
If you use a hardware wallet, this is the best and safest way. Digital wallets are becoming more popular, but can still be stolen by hackers in some circumstances.
What is the most trustworthy cryptocurrency?
So here’s the big question – what’s the most secure and trustworthy crypto?
At the moment there isn’t one that beats all the others. Bitcoin and Ethereum are of course the major players and the ones everyone knows. Due to this, they’re more trusted and investors know more about the pros and cons. They do have more security features as they use decentralized blockchain technology. They’re also both more widely adopted than other forms of this tech and therefore less prone to huge swings in price or market volatility – though they’re not completely immune.
In short, you know how to trust a cryptocurrency if it’s well-used – secure, and has a relatively long-standing reputation in the market. If you’re a new investor, stick to the tried and trusted ‘brands’ and don’t fall for anything that hasn’t been around long enough for the long-term investors to see how it fares. Markets can change a lot and trading can occasionally suffer from volatility – but as more people start to adopt Bitcoin and get used to trading on decentralized platforms the easier it will become to trust!