London, UK, 4th Dec 2021, ZEXPRWIRE, Crypto trading is for sure one of the most exciting trading opportunities to come along in a long time. It is especially interesting for investors due to its extreme volatility. The price of Bitcoin or any other cryptocurrency is very likely to fluctuate 10% in either direction at the drop of a hat. TrueNorthBit Broker Richard Walton says that this makes it possible to massively increase your investment overnight with one single good trade! With that being said, the nature of cryptocurrencies also means that there are several risks associated with purchasing and selling them. You should thoroughly weigh each of these risks before you decide to invest your money.
The first risk is that investing in cryptocurrencies might be a scam! Many people have lost large amounts of money because they were trying to invest in currencies that did not exist or because their investments were used for other purposes by hackers who gained access to the victim’s wallet. Apart from this, there has been a lot of fraudulent activity such as pump and dump schemes where people created fake demand for currencies to make prices rise before selling off their own tokens. Finally, there are also “pump and hold” scams where criminals double or triple the price before disappearing with all the money they made from the victims who bought into the hype.
A second risk is that you could accidentally fall for a scam when purchasing tokens or coins. One common practice of scammers is impersonating platforms that sell tokens. When you type the name of a coin into Google, it is not uncommon for fake websites to appear on the first page of results. It is easy to accidentally visit fake sites where criminals will try to steal your private key or password.
Firstly, if you are buying from an exchange, then be sure to only use the most reputable and trusted exchanges such as TrueNorthBit. This is important because if you send your money to a criminal, there is no way to get it back – even with the help of the police. Secondly, you should also be careful when making purchases in person.
A Non-Fungible Token (NFT) is a token that has special characteristics that set it apart from other tokens on the market. These special characteristics are represented by each token’s unique identifier. NFTs allow users to manage and track any individual token, as well as the value associated with that token. Mr Walton says that people are actively moving towards NFTs for multiple reasons. Firstly, they can easily be traded as there is no risk of one token being accidentally swapped for another. Additionally, many projects prefer NFTs because it is easier to manage their resources and assets using them.
NFTs are created using smart contracts. This means that if someone were to create a non-fungible token, they would need to specify what properties make an item unique and attach these properties to the token identifier in their blockchain system. Then the token is able to be recognized by the system for what it is. The token owner can use their wallet to manage what each unique asset does with that information being stored on the blockchain, allowing them to keep track of everything they have created or purchased.
One of the major things to know about NFTs is that they are completely distinct from cryptocurrencies. Although some currencies do create non-fungible tokens as well, the two are not interchangeable, and you should never treat an NFT like a cryptocurrency or vice versa. The reasoning for this is because all of the information associated with NFTs is taken from the blockchain, meaning that even if your wallet is hacked or you send it to the wrong address, then all of those assets are still yours and exactly where they always were on the blockchain. There are a lot of different reasons why NFTs could become more popular than cryptos, even though the two are often confused with each other.
Firstly, depending on how smart contract technology develops, NFTs could potentially be used to represent a lot more assets than just cryptocurrencies. Secondly, if a project were to create a token and issue it to everyone who was part of a project before the tokens were launched, then this would avoid all of the problems of not being able to grow the currency enough for everyone.
Mt Walton says that keeping all of this in front, we now know why so many people are making a shift towards NFTs. In fact, recently, a survey was conducted by a Japanese crypto exchange, Bitbank. They reported that 26% of the crypto users in Japan had held NFTs. If the strict regulation around crypto continues, then it is very probable that NFTs will gain even more interest in the crypto community. This is why so many projects are now beginning to create their own NFTs.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.