What is cryptocurrency?
Cryptocurrecy also known as crypto is a kind of digital money. It is a type of money that can only be spent online, it can't be seen not felt like Fiat(normal naira / dollar). It is also used for the exchange of goods and services. It is based on a decentralized network and it is unable to be hacked into.
There are various cryptos which has been grouped into various types. We have the ALT coins e.g BTC, Shit coins, arbitage coins and so on.
Crypto has been the latest talk of town and it is hoped to take over from fiat in due years. This project looks good and nice but there is nothing on earth without a disadvantage. Let us look at some of the disadvantages cryptocurrency.
This currency is been equivalent with dollar. As much as this currency seems to be independent, it still needs to work hand in hand with dollar. When the rate of dollar drops or when dollar losses it value there is a tendency that cryptos will also loose it value. This is a disadvantage been that when dollar crashes cryptocurrency will also crash. Also fiat is needed to get the cryptocurrency so there is no crypto without fiat
Once cryptocurrency is fully accepted world wide, it will be hard to trace criminals such as terrorists, kidnappers and assasins. This is not far fetched from the fact that
A. Untraceable owner; all one need to own a cryptocurrency is a wallet to store the cryptocurrency and money to buy the crypto. No information of the wallet holder is collected. The owner of the wallet can't be traced because of the high encryption.
This makes it easier for criminals to get away with their crimes because they can't be traced if paid through crypto currency.
Cryptocurrency has enhanced fraud due to the fact of the point above (untraceable owner). There has been lot of Ponzi scheme due to cryptocurrency.
Alot of coin and token has been created Which later turn out to be a fake project. They just set out to dupe people of their money and resources, after the aim is met they close down and it's unable for them to be traced.
Due to the way people talk about crypto alot of people has ventured into it without proper research which causes loss to them at the long run. When a coin is dumped the value goes down and can go as far as 500% loss in value. This is another disadvantage of cryptocurrency
###5. Depends on people:
truth be told Cryptocurrency isn't independent as said. Crypto actually depends on people so the value can increase as time goes on. The amount of holder of a coin and the amount of people holding the coin depends on the value of the coin.
The actions of certain people also determines the value of a coin. For example there are people called the whales. This are billionaires in crypto they are the ones that buy the larger share of a coin. They determine which coin they want the value to rise and vice versa.
When they get the coin and hold for sometime once they decide to sell the coin there is always a drop in the value of the coin because every other person also starts to sell the coin because the value is dropping. So the whales and Wall Street are the one who control the price of cryptocurrency.
when a wallet is created there is a phrase given to each account. It is believed that once this phrase is misplaced one can't regain the wallet back irrespective of the amount of coin or millions in the wallet.
So if one isn't very careful one can loose his/ her life saving for a simple mistake. Also when one seed phrase is stolen by someone else the person has access to your wallet and can transfer all your coin and asset to his own account, and there is no way to stop such activity, except to just accept fate.
alot of people have ventured into crypto Investment with their life saving thinking they will be able to get profit fro it. At the long run they fall into lose and this causes some people to commit suicide or fall into depression.
Although there is risk in every business but crypto has been putting people to depression lately.it also ruins people's mental health.
since crypto is an online currency this means that without the internet one can't spend his or her money. If there is network issue or unavailability to get data service ones money is as useless as p in pneumonia.
Listed above are the negative effects of crypto currency
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