Author: Jamshid Dianati, Qom, Iran 🇮🇷, Farsi, wa.me/989120521873
Introduction
Typically, the wrongness of investing in digital currencies is less discussed and everyone encourages you to do so, but in this article, we intend to fully and comprehensively review the disadvantages of digital currencies.
Risk in digital currencies
Every market has its own risks for investment.
From the real estate market and the car market to the stock market, forex market, and cryptocurrencies market, each has its own unique challenges.
For example, one of the investment methods among Iranians is saving in a bank.
But statistics show that the rate of profit earned in bank accounts is so low that it does not even preserve the value of cash assets against inflation.
It is not possible to examine all the disadvantages of each currency individually as the intensity and weaknesses of these disadvantages will vary.
Now, let's review some of the most important disadvantages of cryptocurrencies.
Lack of Regulatory Laws
The biggest reason for the wrongness of digital currencies is the lack of regulatory laws governing the entire market to reassure you for investment.
For example, anyone can create a digital currency on the blockchain network.
Therefore, there is no guarantee for the usefulness of digital currencies, and there is no law in place to prevent the emergence of these scams.
It should be noted that the absence of a regulatory body for digital currencies and monitoring of this market contradicts the nature of these cryptocurrencies.
That is, not relying on government agencies or organizations is one of the main features of cryptocurrencies, and individuals in these markets believe that this is an advantage.
Therefore, it is not possible to conceal this open fraud and common scams.
Market Full of Scams
Another reason not to choose to engage in digital currencies is the presence of numerous scams and frauds in this market.
The existence of hackers and thieves in this market is very natural and normal, and in fact, this category of users continues their activities without any legal repercussions.
As a result of this official lawlessness, if you lose all your cryptocurrencies and assets in this market due to fraud and deception, you will ultimately have no means to complain to any authority.
Since the beginning, this issue has been completely transparent, but some individuals, driven by greed, turn a blind eye to these illegal activities.
Lack of inherent value
Another disadvantage of digital currencies is that they lack inherent value and do not actually hold a position in society.
One of the main indicators of the strength of an act is to examine its intrinsic value to determine its popularity.
For example, if you invest in a commodity like a pair of shoes or sandals, it feels better and certainly has better returns because it is a physical item that has value.
This major drawback has always existed for cryptocurrencies, and even Bitcoin, which has provided significant value and profit to its users in recent years, is not exempt from this issue.
Bitcoin currently has no physical backing and all its conditions are based on the internet and the virtual world.
Lack of Acceptance in Society
In reviewing the disadvantages of digital currencies, it should be noted that these currencies lack acceptance and approval in larger communities.
According to statistics, very few users and individuals in society are currently using and engaging in the cryptocurrency market.
Destructive Impact of Volatility
One of the reasons why choosing digital currency is wrong is the instability of this market.
The high volatility in a short period of time leads users to enter the market with excitement and decide regardless of the fact that such conditions can, like an earthquake, wipe out all their capital overnight.
By engaging in this market, you must be prepared at any moment to lose your valuable assets.
The digital currency market, as much as it is attractive for profit, also has a very high potential to wipe out users' capital.
Geographical Limitations
Another reason that makes choosing digital currency, especially in Iran, wrong is the special conditions in some countries.
The special conditions that exist for an Iranian user in such a market expose its disadvantages with greater intensity and various weaknesses compared to foreign users.
Therefore, Iranians must act cautiously and not expose their valuable capital to great risks and entry into this market.
Statistics show that due to these sanctions, the assets of Iranian users have been blocked by websites, and because of the lack of laws mentioned, they have not been able to take any action.
Conclusion
There are various studies aimed at showing the percentage of people who have suffered losses in financial markets.
These reports show that between 50 to 90 percent of traders in financial markets and digital currencies have incurred significant losses during their activity.
Some experts say that due to the risks associated with engaging in this high-risk market, the statistics of traders who buy and sell digital currencies and have incurred losses are higher compared to other markets.
Most people who enter the cryptocurrency market with the hope of making a profit from their capital ultimately leave the market after losing all their capital.
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