Home BTC Crypto Currency Major Threats Against Cryptocurrencies

Major Threats Against Cryptocurrencies

With the growing number of followers, there is no doubt that cryptocurrencies have already established their own market. And it appears to be growing exponentially year after year thanks to the craze brought about by the fear of missing out on the opportunity. To decrease this uneasiness, you can take advantage of crypto media portals such as CryptoQuadriga. The specialists there make market analysis and in depth price predictions, as well as broker/tools reviews, which tend to be very useful. Having said that, we can go back to the initial topic of our article today.

Market Saturation

The market base of cryptocurrencies has been unstoppable over the years. As the good news spreads from one country to another, there is a good chance that some would directly hop on the bandwagon. Most likely, it is attributed to the promise of potential returns that reverberate in the crypto community. And everyone would want to get a share of the pie. 

However, the market can only expand so much. It may reach its tipping point sooner or later with the increase in the number of crypto players. There might come a time when the market becomes saturated that it could no longer accommodate new entrants. No wonder it is a good thing that not all crypto players get to stay in the game. This could prolong the possibility of market saturation.

One way to prevent this tendency is to carve a new niche for every crypto trading player. That means every entrant will have to offer something different to be able to differentiate its market. It would be prudent for a new cryptocurrency to focus on offering something new rather than simply offering something cheap. Prices will not matter in the long run, especially in the midst of tough competition. 

Indirect Competitors

There is a brewing competition between cryptocurrencies and digital money. China had already declared a battle against crypto coins when it imposed a ban on electronic commodities. This way, it could boost the promotion of the digital Yuan that was recently launched for its initial rollout. The trial went well following a lottery for digital money giveaways. 

Several other countries will soon offer their digital version of the legal tender. Europe is in the process of assessing the viability of the digital Euro. After the investigation stage, it will be focusing on the design of the system by taking into consideration the demands of the public and private sectors. This would leave America behind with its apprehensions over the concept of making digital dollars.  That is according to the latest statement by the Federal Reserve. 

Whether digital money will have a successful run, it is noteworthy that cryptocurrencies will not idly stand by. The crypto market has been continuously embracing innovation to be able to better respond to the needs of the market. Bitcoin, Ethereum and Cardano have been leading the way in raising the crypto standards. In effect, digital monetary platforms will have to catch up. 

Cyber Attacks

Cyber fraudsters are not going anywhere. They would be around looking for opportunities to attack the system. Some have already succeeded in doing so. But, they can only evade the authorities for some time. As long as their digital fingerprints are traceable, they can always be found in a matter of time. The Japanese authorities have identified and arrested those responsible for the crypto exchange heist several years ago.

Most crypto trading platforms have implemented preventive and corrective measures to address the need for increased security. Behind every system is a team of IT professionals working on its defense 24/7. And it is also ready to go after the perpetrators should the latter make a breach. 

The government is also doing its share through the investigation of cyber attacks. It would also issue warnings from time to time about fraudulent cryptocurrencies and crypto exchanges. This is why it is important to listen to these updates so as not to fall prey to crypto predators. 

The security of crypto coins and crypto exchanges has always been a work in progress. In case the system’s vulnerability has been exploited by hackers, rest assured that the developers would fix things to restore and fortify the system. There is always a technical solution at the end of the day.

Conclusion

These are only some of the threats representing risks in cryptocurrencies. This is why you should observe vigilance when you delve into crypto trading. It is a high-risk environment that demands highly diligent investors, too. 

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