Imperfection of the cryptocurrency phenomenon

in #crypto4 years ago (edited)

 The past couple of decades have seen continual advancements in technology. These advancements have made it possible to improve many other areas of our lives and culture.Communications, health care, and business management have all been enhanced with new and better technology. Therefore, it was only a matter of time before technological improvements inspired the idea of a better currency.But just because there’s a new currency out there it does not mean it’s infallible. Although it’s designed to be more secure through encryption, there are still risks of using cryptocurrency.

How Does A Cryptocurrency Wallet Work

 

 A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance. In the same way the Noozzle wallet will work.If you want to use Bitcoin or any other cryptocurrency, you will need to have a digital wallet. A wallet address is like a bank account number. In the world of cryptocurrency, if somebody wants to transfer you coins, you simply give them your wallet address. Just like in the real-world, no two wallet addresses are ever the same, which means that there is no chance that somebody else would get your funds. Also, there is no limit to the amount of wallet addresses you can create.

Where to Store Your Cryptocurrency (types of cryptocurrency wallets)

 There are a few types of cryptocurrency wallets, so you can choose any of them which better fits you.

  • Hardware: wallets differ from software wallets in that they store a user’s private keys on a hardware device like a USB. Although hardware wallets make transactions online, they are stored offline which delivers increased security. 

Pros: Funds stored offline and are very secure since hardware wallets require a password to use. Very easy to use and make transactions online.

Cons: Can be bad if you end up losing the wallet and losing access to the recovery words. 

  • Paper: wallets are easy to use and provide a very high level of security. Using a paper wallet is relatively straightforward. Transferring Bitcoin or any other currency to your paper wallet is accomplished by the transfer of funds from your software wallet to the public address shown on your paper wallet.

Pros: High level security.

Cons: Can be fairly tasking to send currency from paper wallet to software wallet all the time. 

  • Desktop: wallets are downloaded and installed on a PC or laptop. They are only accessible from the single computer in which they are downloaded. 

 Pros: Very secure on your own device.

Cons: If something happens to the device the keys will be gone. 

  •  Online: wallets run on the cloud and are accessible from any computing device in any location. While they are more convenient to access, online wallets store your private keys online and are controlled by a third party which makes them more vulnerable to hacking attacks and theft. 

Pros: These keys can be accessed from various devices.

Cons: Control by third party makes it less secure to being hacked. 

  • Mobile: wallets run on an app on your phone and are useful because they can be used anywhere including retail stores. Mobile wallets are usually much smaller and simpler than desktop wallets because of the limited space available on a mobile. 

 As Noozzle team founds this type of wallet the most convenient, we started to develop it with our community.

Pros: More accessible than desktop wallets, can be taken with you anywhere.

Cons: Keys can be lost if something happens to the device. However, you can recover it easily with your seed phrase! 

Where to Buy Cryptocurrency

 Just one year ago, there were only a few places to buy and sell cryptocurrencies. But now there are a lot more.

1. Cryptocurrency exchanges are online websites which let you exchange your local currency for cryptocurrency. Exchanges are the most popular way for buying cryptocurrency. I recommend newcomers to use these exchange websites as they are easy-to-use and quick to set up.

Payment Method: Most of the exchanges accept payment by bank transfer or credit card, some of them also accept PayPal.

2. Broker exchanges are like the currency exchange shops that you find at airports. However, instead of exchanging different local currencies with each other (such as YEN to USD), you can exchange your local currency for cryptocurrencies. 

 Private and public keys

 Private keys and Public keys are the foundation of every blockchain network. In purely cryptographic terminology, every security system requires a public key for location and a private key for private access.

Issues with Private Keys and Public Keys 

 There are two primary issues that come to mind with private keys and addresses. One is that the alphanumeric string representations of private keys and addresses are hard to find on the internet. For example, if you want to access your wallet, you will have to remember your wallet’s address and private key in forms such as “A532128B29C” and “F6432E2353A986.” While this feature of most blockchain networks helps us differentiate users from each other, it severely hampers user access. 

 Another issue is that, if you keep multiple types of tokens in multiple wallets, it becomes difficult to keep track of the variety of different private keys. Imagine trying to invest in multiple cryptocurrencies only to learn that in order to do so, you must maintain one wallet for each coin. You would then write down the address of each wallet and the corresponding key on a post-it note. You come back to your office the next day only to learn that you mixed up a private key with the wrong address, or that the janitorial service threw away your note since you forgot to write “do not throw away” above the memo. If this is the case, you would instantly lose all of your invested assets on the blockchain, and without recourse. 

 Difficulties you can face while selling or buying cryptocurrency.

 Price manipulation

Another term for price manipulation is ‘buy walls’ and ‘sell walls’ often initiated by a group of individuals in the crypto market, known as ‘whales.’ The whales, or major investors, can carry out the manipulation without spending even a cent. When the price moves in their favor, the whales can relocate their position to squeeze the price range again. As the market changes direction, the walls disappear, and the cryptocurrency price drops. 

 Scam and Ponzi schemes

In crypto trading, you can tell whether a project is a scam — they always guarantee a profit. The crypto market has several investment platforms, tokens, mining operations, and coins that promise guaranteed returns. These are obvious scams and Ponzi schemes out to swindle investors of their hard-earned money.

Fake news

Fake news is an obvious problem in the crypto space, picked by editors from social media platforms and forums without proper fact-checking. Once such stories appear on the front page of mainstream publications, they circulate as the gospel truth and absorbed by unsuspecting investors in the crypto space.However, such news turns out to be false, and the worst part is that the cycle continues. Usually, the audience has no way of determining which cryptocurrency news is a sham and which one is genuine. The public often relies on the mainstream media for the verification.You may like to follow us on Twitter: https://twitter.com/NoozzleSpace to get the latest and truthful updates about the cryptocurrency tendencies.

Transaction delays in cryptocurrency trading

Another common problem in cryptocurrency trading, delays are present in nearly all transactions. Most crypto platforms are slow — from opening a trade to making deposits or withdrawals. In various chains, it takes forever to complete a transaction, which is a setback on the part of the investor.Transaction delays are just some of the major problems that affect the quality and experience of cryptocurrency trading.

Losing a wallet file

Once earned, crypto assets require a safe storage in a secure digital wallet. However, digital wallet loss or theft is one of the problems plaguing cryptocurrency trading. File losses can happen due to hard disk crashes while malware infiltration could lead to theft.To minimize the problem, traders should have a separate hard copy for their secret keys. Alternatively, they can purchase USB hardware wallets for offline storage.

Error in the user address

Another regular problem in cryptocurrency trading is the error in user address, which eventually leads to loss of money during a transaction. For instance, a trader with an Ethereum wallet could easily lose money if the last digits of the address are not copied properly. In the end, the money disappears or more money is transferred to the recipient.

Cyber-crime activities

In a previous article, Noozzle mentioned various cybercrime activities in the crypto market. Major hacks and heists have taken place in the cryptocurrency market since its inception, initiated by cybercriminals.Such activities have resulted in a loss of huge sums of money and some platforms even ceased to operate. When such hacks happen, the prices of particular cryptocurrencies are affected and in most cases, the value drops by big margins. 

 Conclusion

 An unbiased observer is likely to conclude that digital currencies have a lot of future potential, but a lot of problems to overcome before they realize it. It’s up to you whether you think the time is now for cryptocurrencies, or if traditional money systems are safe for the time being. And before you decide to use cryptocurrency you should explore all the nuances, all the pros and cons of it. 

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