In the empire … coin

Of the tens of thousands of coins listed on centralized (CEX) and decentralized exchanges (DEX), only a very small percentage actually has a basis of value, the rest are movements or intentions.

Last week, the price of Bitcoin (BTC) hit a new high, around USD 70,000 / BTC, and the market capitalization of cryptocurrencies also hovered around the $ 3 trillion mark, but then fell at the same level. Many cryptocurrencies (crypto) have risen ten or a hundred times in price from the beginning of the year to the present day. fever BTC It is also being warmed up by some US politicians who recently expressed their desire to receive a salary of. to obtain BTC and introduce crypto in schools.

The charm of BTC and some crypto

Digital coins come in the form of crypto or tokens. While crypto is the native asset of a technology or an ecosystem, a token is a newly created asset based on an existing foundation. Because token generation is easy, the real value of a token is the value of the application using that token.

Blockchain technology, or more generally DLT (Distributed Ledger Technology), is a major breakthrough in the modern world to address the inadequacies of previously complicated and expensive transactions, such as how each person in the transaction chain must have their own system of records in which human Failure is likely, confirmation from one or more intermediaries is required, and delays or losses can often occur. And smart contract (smart contract) is a typical application of this technology.

As a symbol of the blockchain, BTC Cryptocurrency is recognized worldwide as a form of digital gold. BTC attractive because of the important properties of money as a means of payment, exchange and store of value BTC everyone has. But more than that BTC The value used in maintaining the Bitcoin ecosystem as well as security is great value but very convenient. And similar to BTC is the cryptocurrency of a number of ecosystems that are ascribed potential in terms of usage demand and development potential. These are ecosystems that include Exchanges, Loans, Crosschain, Gamefi, and Web 3.0.

Although more and more institutions and financial institutions for BTC and crypto, but the biggest draw is young people. The crypto investment community is mostly made up of Millennials or Gen Z because investing in crypto with the app on the phone is very convenient, the initial investment is not much, there is an exchange community to share with you thanks to crypto get rich quick.

Traps scattered everywhere

That the Squid Game Coin was instantly devalued from top to bottom is an important wake-up call for those investing in the coin. With the exception of BCT and ETH, which are two confirmed and recognized cryptocurrencies, some large-cap cryptos still harbor certain risks, such as being unable to lure more applications into the ecosystem in order to grow in size to grow. The rest of the tokens are very vague in terms of applicability and scalability.

Trading on decentralized exchanges is not only the risk of coins being inflated (pump and dump), but also a considerable risk for crypto investors. There have been cases in which the floor collapsed according to the correct procedure, but actually according to the intention of the floor creator, with the aim of illegally appropriating the coins placed on the floor from investors. As a result, seasoned investors are often spread across many exchanges and often only move to their wallets for safekeeping when they need to trade to transfer to the exchange.

The risk for crypto investors is also the possibility of theft when storing coins on the internet. More and more cyber criminals are targeting people who have crypto on their computers, smartphones or tablets in order to steal it.

The above risks apply to individual investors if the coin has been listed on a particular exchange. However, the pitfalls are also aimed at investors who have gained experience and significant capital through token development projects in the pre-listing phase.

Many investors have a lot of experience in other areas, but are attracted by the dream profit from the coin, so they have been invited to take part in token development projects, the technical background of which they do not know. . Project projections are always beautiful and full of potential, but the evidence is hard to find. In markets where crypto is not yet recognized, such as Vietnam, the risk is much greater, especially when it comes to legality. Lots of technology-based projects DLT technically stable and potentially, but legally limited like the difficulty of some real estate tokenization projects.

Full of potential but be careful

The trend for the digital currency to become an asset class is becoming more and more apparent. With some coins, investors today not only expect a price increase due to the supply-demand ratio (the supply is limited while demand increases), but can also make a passive profit through trading. put). Investing in a particular crypto depends heavily on the growth potential of the ecosystem that uses it and, in the case of tokens, on the development of the application.

The attraction of new cryptos or tokens through price fluctuations is enormous, if not tempting. However, finding a good investment opportunity in the coin market requires a lot of care and good luck.

For new investors, one general advice from seasoned cryptocurrencies is to start with recognized cryptocurrencies that have high capitalization and liquidity. Also, knowledge of technology, security practices, and how to use the Internet safely are very necessary to protecting your investment.

DR. Vo Dinh Tri

TBKTSG

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