People have a question in their mind that crypto is a safe investment or not? Because it is highly volatile and there is no central authority like a bank or government available that can control such digital assets. Bitcoin is the most popular digital asset in the world and it is completely safe because the U.S government and the European Union have declared their tax regulations regarding such cryptocurrencies, and it is completely legal when you pay taxes on your assets. But there are some countries like China has banned bitcoin and other cryptocurrencies in their states. Although, some countries like India have passed some measures to control the usage of such digital currencies to prevent illegal transactions and money laundering activities.
Due to high volatility, some gaming platforms like Steam have stopped accepting payment via bitcoin, but large companies like Microsoft, PayPal and Overstock started accepting payment via bitcoin. Even, Elon Musk, founder of Tesla has declared the beginning of the company accepting payment via crypto. Later he generated a public notice that due to environmental issues, his company will not going to accept bitcoin anymore.
However, you can also pay for your coffee at Starbucks via bitcoin. You cannot pay your bill at their counter via bitcoin, but you can recharge your Starbucks wallet with bitcoin and use your wallet at any of their outlets to buy their coffee and beverages.
Why do people opt for bitcoin if it is unsafe?
Bitcoin is completely safe because people are using their coins to make their online payments as you need to pay fewer transaction fees while you transfer your funds through bitcoin. For example, you need to pay a 2% to 3% transaction fee to your bank if you make an international transaction with your credit or debit card, and you can reduce this transaction fee by using your bitcoin wallet.
Apart from that, you do not need to disclose your identity while you make a payment via bitcoin. So, it will give you utmost privacy while you make such international transactions and your data will be safe.
The protocols and cryptography run under the structure of bitcoin transactions are strong enough to protect your personal information because DLT or distributed ledger technology is used for generating such coins and making transactions with bitcoin. DLT used in bitcoin is known as blockchain technology and you can save a record of your all transactions. All these transactions are available in a public ledger and data breach is not possible in this network.
The blockchain technology used in the bitcoin network cannot secure the exchanges because exchanges are the trading platforms that are maintained by individual companies. You need to open a crypto account to trade bitcoin and you can use a wallet to store your coins. Make sure, you must check the safety measures of such trading platforms before you use them.
It is true that crypto exchanges do not provide enough insurance and security to their wallets as banks can provide to their customers. According to a report published by CrowdStrike Intelligence, cryptocurrencies worth $293 million have been stolen from 12 exchanges in 2019 and more than 510,000 crypto accounts have been hacked. In 2020, $3.78 billion in cryptocurrencies have been hacked. These activities are known as cryptojacking, which is a form of malware attack. So, it is necessary to keep your wallet safe. Therefore, sharing your private keys would not be a good idea.
How would you keep your coins safe?
To keep your bitcoin safe, you need to choose a reliable exchange and you must choose a secured wallet. If you are not a daily trader then you can choose an offline wallet. Such wallets are hardware-based where you can connect your device with your system to access your wallet.
Apart from that, if you choose a hot wallet that can be downloaded on your mobile free of cost then you can transfer your balance to cold storage, and you can use your hot wallet for daily trading only. It becomes hard for hackers to steal from cold storage. Therefore, always keep the anti-virus and malware protection system on your computer.
Once you have decided to go ahead with the crypto investment, don’t miss to check out the other crypto options like the digital Yuan, which is the official Chinese cryptocurrency. You can log on to Seite to invest in e-Yuan.