The uncertainties of 2020 and the increasing acceptance of
Bitcoin (soon to be available in PayPal accounts) has led Bitcoin
to boom to nearly 2017 levels. Interest in other cryptocurrencies
is also high. A high tide for any asset class can leave holders
vulnerable to fraudsters, scammers and simple theft.
Those new to the asset class should familiarise themselves with
key issues:
- Cryptocurrencies are digital
currencies secured by cryptography often based on decentralised
networks using blockchain technology, a public distributed ledger
with no central authority.
- Unlike traditional fiat currency,
Initial Coin Offerings or Securitized Token Offerings,
cryptocurrency is not backed by Governments or assets. Value is
derived from the strength of the network and what the market is
willing to pay. As such, they are highly susceptible to market
trends and events.
