Today, we have become technologically advanced that we have digital currencies. Such currencies do not have treasury bonds and gold reserve. Digital currencies are also called cryptocurrency. The value of cryptocurrency depends on the platform used. Though it may seem like a good alternative for our current lifestyle. Where people can use their phones and their PCs to pay and receive money. Digital currency or cryptocurrencies may be detrimental if you don’t know about it. Especially if the cryptocurrency platform is not prominent or a trusted platform. There is a possibility of getting scammed or susceptible to fraud. Resulting in a loss of asset or money.
Here are the dangers of using digital currency:
Unpredictable Exchange Rates
The biggest issue regarding digital currency or cryptocurrency is its consistency. The exchange rate and the value of the digital currency are unstable. A perfect example of this was bitcoin when people started investing in bitcoin. The value of this cryptocurrency was lower than a dollar. But during its peak in December 2017, one bitcoin valued for over $19,000. To date, one bitcoin equates to $1000 to $6000. Thus, this shows how unpredictable cryptocurrency is and how to exchange bitcoin. A high-risk, high-reward industry where few are successful.
Fraud And Scams
Another issue when it comes to digital currency is to avoid fraud and scams. There are a lot of cryptocurrency platforms that emerged after the famous bitcoin peak. People were excited and thrilled to invest in digital currency. Until several platforms ran away with their investments and their assets. That is why you have to be careful in choosing a cryptocurrency platform. Make sure that the platform you are investing in is reliable and trustworthy.
Lots Of Competition
For people who want to invest in digital currency. Consider the possibility of getting overlapped by competition. And this is especially true for valuable platforms. Where people flock and invest in a single platform. Reducing its value and the probability of gaining profit.