Consider the risks of cryptocurrency

Cryptocurrency risks discussion here I would like to introduce.

Everyone is Bitcoin and other cryptocurrencies’ risks, as seen in the news, have some level of awareness.

Among the more than 1,000 types of cryptocurrencies currentlyover 90% are said to be scams.

Why is “cryptocurrency” considered suspicious?

【Exchange collapse】

The most famous example is Mount Gox, the world’s largest Bitcoin exchange based in Japan, which collapsed in February 2013.

As a result of this incident,the image of Bitcoin as “suspicious/dangerous” took root among Japanese people.However,I think most people who are not familiar with cryptocurrencies may think that way.

People heard the name Mount Gox, which sounded unfamiliar, claimed to be the world’s largest holder of Bitcoin, and that Bitcoin disappeared somewhere!

So it’s not hard to understand that people may think, “Bitcoin = disappearance! dangerous!”

【Why Bitcoin is stolen】

However,we need to look at the more fundamental aspects.

Mount Gox was an exchange, a place where cash (yen or dollars) is exchanged for Bitcoin, in the cryptocurrency world.

It feels the same as FX brokers or banks' currency exchanges.

To put it in the real world, the collapse of Mount Gox is like a bank being robbed and collapsing.

This point is important.

If a major bank is robbed and the bank collapses, you wouldn’t say “Japanese yen is dangerous,” right?

The idea that Bitcoin is dangerous because Mount Gox collapsed is the same thing as saying

what happened outside of the Bitcoin system.

It’s actually the opposite way of thinking, but

why would hackers steal Bitcoin in the first place?

Robbers, as a matter of course,steal “things of value.”

The perpetrators of the Mount Gox incident likely anticipated that if a large amount of Bitcoin were stolen from Mount Gox, the company would collapse and negative rumors about Bitcoin’s reliability would spread.

Nevertheless, they stole Bitcoin.

This means that despite Mount Gox’s collapse or temporary negative rumors about Bitcoin, hackers judged that “Bitcoin has value” and chose to steal it.

【Mindset for investing】

My first advice when investing is that you should study the investment target to some extent.

In reality, there are stories of scam currencies circulating and people buying currencies they don’t understand well.

Most people didn’t study and convince themselves to buy; many were advised by others and bought.

Such things lead to deep regret when you lose money, doesn’t it?

Investing always carries risk.

That’s true for any investment. Not just investments, life itself is full of risk.

Study the investment target yourself, identify possibilities, understand the risks, and invest.

That is the proper, ideal form of investing.