What You Should Know Before You Hop on the Cryptocurrency Bandwagon

by Roseann Freitas | Oct 10, 2019 10:13:25 AM

Watching the reel lines on the slot machine go round and round,
listening to the jangling bells, you wait and hope to hear the cha-ching of
coins. Yay! I won!  A casino’s bells,
dings and flashing lights draw players in, tempting them to keep playing ‘til
they hit the big one, quit their job, and live the life of luxury. When I play
the slot machines, I only spend money I can afford to kiss goodbye. Gambling
isn’t an investment plan and the odds are always against the player. This same
philosophy should apply to the latest get rich, quick, dream: cryptocurrency.

Cryptocurrency has a place and purpose; it is a resource for
investing and transferring money all over the world without incurring hefty
fees and not under the control of governments. But, unlike the dollar which is
backed by the US government and is a physical item, cryptocurrency is digital
code, not considered legal tender, and banned in many countries.

Once you purchase crypto, you have entered the world of
blockchain and nodes. The blockchain is the means of transporting the data
information, and the nodes are the receivers. Different cryptocurrency
companies have various nodes, which store transactional information.

Since cryptocurrency is new and not backed by a government
entity, the price valuation is volatile. You may have heard stories of people
making thousands overnight, but the reverse is also true, people losing their
money overnight.  One red flag for
investing in crypto is “too-good-to-be-true” statements of quick return with no
or low risk. Performance and risk go together. The higher the return, the
greater the risk.

With many companies joining the crypto bandwagon, be aware
of Initial Coin Offerings (ICO). ICO is fundraising for new crypto. Many ICO’s
are legitimate; however, some ICO’s are set up to take your money but do not
have a plan or the technology to back this up. So you can kiss your money
goodbye.

Crypto is also an excellent vehicle for scammers since many
users don’t yet understand the technology. These digital transactions are not
reversible, so if you are the victim of a scammer, kiss your money goodbye.

Secure storage of the digital code is imperative to prevent
theft, loss, damaged, or a cyberattack. That also means if you forget your
password or credentials you could, again, kiss your money goodbye. Sensing a
theme here?

Like playing the slots in Vegas, cryptocurrency is
speculative and high risk. Remember that before reaching in your pocket for
another token.

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