Cryptocurrency and blockchain technology are hot topics as of late. It seems that a lot of people are investing in initial coin offerings (ICOs), purchasing coins, or getting involved in some other way, and they can’t stop talking about it. Why?
There is a ton of potential in the crypto community. The technology and the uses for crypto and blockchain are seemingly endless. New companies are popping up everywhere and revolutionizing their respective industries. Deedcoin, for example, is finally changing things up in real estate, and Boontech is changing the job marketplace for the better.
Even people who aren’t deeply familiar with the crypto community and the way that everything works are getting involved and investing. There’s just too much potential and opportunity to pass up. The crypto community isn’t without its issues, though. Every industry faces challenges and troubles—some that are specific to individual companies, and some that are general issues in the industry as a whole, and the crypto community is no exception.
Although it has a lot of potential and there’s a lot of great stuff going on in the crypto community right now, there’s also some lurking trouble that members of the community and those looking into getting involved should be aware of. Here are five types of trouble lurking in the crypto community that you should keep your eye on.
Pumping and dumping. “Pump and dump” is a phrase used in the crypto community that describes the practice of getting people to buy coins or tokens, inflating the price, then selling your own shares while the price is high, leaving everyone else with expensive but low-value crypto.
Unfortunately, the practice is way more common than it should be and it’s not always easy, especially for crypto novices, to spot a pump and dump right away. Pay attention to the market—if you see a low market cap, low volume crypto suddenly take off without any warning, that can be a tip-off that someone is running a pump and dump operation.
Price manipulation. Cryptocurrencies and tokens are very volatile and will fluctuate dramatically in very short amounts of time. That fluctuation makes it easy for individuals to manipulate the market and the price of any give crypto.
Individuals can simply open up a buy position, indicating to investors that that crypto is going to take off. Naturally, investors will take that as a good sign and want to invest, and will ultimately drive the price of that crypto up much higher than it originally was.
Hackers. When making payments, storing data, or doing any dealings online, there’s always a risk of being hacked. Luckily, there are a lot of preventative measures in place to help you protect your personal and sensitive information, but those measures don’t make you immune to hackers.
Although it is generally considered more secure than cash and card, crypto is subject to being hacked as well. Take, for example, BitGrail. It was one of the largest trading hubs for RaiBlocks (rebranded to Nano) cryptocurrency, but it was hacked or had “unauthorized transactions” processed, which resulted in 17 million Nano disappearing.
Scams and fraud. The crypto community is relatively unregulated compared to other industries. While there are some regulations and rules in place, it is still fairly easy for scam artists and fraudsters to take advantage of unsuspecting victims. Many ICOs have been uncovered as scams and investors have had a difficult time getting back their investment if they were able to get anything back at all.
Other companies’ operations are just downright shady. As mentioned above, BitGrail was hacked, resulting in 17 million Nano being lost. What’s concerning about the hack isn’t just the amount that was taken, or that any coins were taken in general—what’s strange is that the only crypto that was taken in the hack was Nano.
Not only that, but shortly after news of the hack was released is when RaiBlocks rebranded. They announced that they would no longer operate under RaiBlocks, but would be rebranding to Nano—a name which is already being used by the legitimate crypto company, Nano Vision. Those events and their timing have raised a lot of questions from members of the crypto community.
Fake news. No matter what the industry, there’s no getting away from fake news. Think about how many times you saw news of an actor’s death, only to find out a few days later that they were alive and well. Unfortunately, the crypto community is full of fake news too, and it makes its way into the mainstream media.
This means that editors pick and choose the stories they want to run and without proper fact checking before publishing. They are feeding false information to those both in and simply interested in the crypto community, and when their stories are uncovered as false, there seem to be little to no consequences.
Just like any other industry, the crypto community faces troubles and issues that can really cause problems for members. It has a lot of potential and a lot of good in it too, though. What are your biggest concerns when it comes to the crypto community? Do you let those hold you back from getting involved?Opinions expressed here by Contributors are their own.