TVC E. We are in the era of digital currencies and one of the most famous is bitcoin. A lot of other digital currencies have also been popping up here and there such as swisscoin and onecoin.
Just like bitcoin, swisscoin and onecoin are cryptocurrencies or digital currencies created and controlled using cryptography.
Cryptocurrencies such as bitcoin have soared in popularity and there’s so much buzz about it though many are yet to understand how it works.
The Securities and Exchange Commission (SEC) has advised Nigerians to exercise extreme caution when investing in digital currencies. Recently, MMM Nigeria announced that its new mode of payment for those participating in the scheme will be in bitcoin.
Whatever you decide, it is best you find out more about this digital currency before investing.
Here are the dangers of investing in cryptocurrencies.
1. It is not recognized by any regulatory agency in Nigeria
SEC released a statement on Thursday, January 12, stating that none of the persons, companies or entities promoting crypto currencies had been recognised or authorised by it or by other regulatory agencies in Nigeria to receive deposits from the public or to provide any investment or other financial services in or from Nigeria.
2. It is risky
Life is all about risks but some risks certainly don’t pay off. If you decide to invest in bitcoin, swiscoin or onecoin, you should know that you stand the risk of losing your money. Bitcoin exchanges are entirely digital and are at risk from hackers, malware and operational glitches. There is no protection available to users or investors in these virtual currencies from financial losses.
3. It is volatile
Bitcoin values can be unpredictable. It can increase or decrease over a short period of time. If you decide to invest, you should never invest money that you cannot afford to lose with bitcoin or swisscoin or onecoin. These cryptocurrencies should be seen like a high risk asset.
4. It is still experimental
Bitcoin and others are all experiments of a new currency that is in active development. With each improvement comes new challenges, so if you decide to invest, be prepared for problems.
5. Government clampdown
Some governments have expressed concern about the use of digital money. Some are already seeking to regulate, restrict or ban the use and sale of Bitcoins. However, some have explicitly allowed its use.