Issues Facing The Crypto Market 

crypto marketcap

Introduction

Like all other investment markets, the crypto market has many pros and cons. However, the pros of the crypto market outweigh the cons depending on your point of view.

Learn all about the issues facing the crypto market.

1. Scalability

Cryptocurrency scalability is one of the biggest challenges of the digital market. It is unable to deal with numerous transactions at a time, if it exceeds the number of transactions it can process per second then all transactions are queued for a refill. In this queue, the person who takes the highest place is the one who paid the highest amount in commission.

A solution has however been created for this problem. Even with a solution in place, in case of a large influx of operations, the systems may be unable to cope with the traffic. In such cases, the system experiences a temporary blackout or the pending transactions are canceled which in turn causes the value of the coin to depreciate.

2. Security Issues

Due to crypto coins being digital, this makes them subjectable to hackers, malware, and operational glitches. Hackers can easily gain access to thousands of accounts and digital wallets by targeting and hacking a crypto exchange. One incident that will never be forgotten is the Mt. Gox hacking incident which occurred in 2014. This incident saw the shut down of the Japanese exchange company after bitcoin worth millions of dollars were stolen.

Also, due to the inability to trace crypto transactions, the crypto investment market has been used for any illegal activities.

3. Volatility

The Volatility of crypto is one of the few reasons why it is such a terrible currency. No matter how many vendors claim to accept it, the truth is if you have a cryptocurrency and you have fiat currency you are more than likely to use the fiat money.

This happens because you didn’t purchase these coins to spend, you purchased them as an investment. You will always have it at the back of your mind that the coins could rise at any time which will increase your profits when it does, therefore you would prefer not to spend it.

4. Government Regulations

Since crypto came to be partly out of the desire to escape government regulations and fiat currencies inflation,  regulators are rushing in to control the crypto scene.

When it comes to government regulations, it is a two-way street. The government of some countries has found a way to regulate the crypto market bypassing strict laws while on the other hand federal governments of other countries have not regulated it which makes it a huge risk to invest in the crypto market as there is no stabilizing force.

5. Market Risk

Every investment market centers on proud risk-taking. And like every investment market, the price of cryptocurrencies is sure to fluctuate. Without this short time that cryptocurrency has gained popularity,  the coins have been valued low and high and this is due to the number of investors who do not have adequate knowledge before going into the market. If the resistance to adopt bitcoin, dogecoin and other cryptocurrencies continue then they may lose their value in the long run.

Conclusion

The crypto market is dominating the world one coin at a time. Before investing, you need to go in with your two eyes open and understand the pros and cons of investing in cryptocurrency. Visit https://osom.finance/blog/a-step-by-step-guide-on-how-to-create-an-osom-crypto-gift to learn more.

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