Submitted by CyberHub Summit on Mon, 06/25/2018 - 14:45
5 Simple Truths about Cryptocurrenc
5 Simple Truths about Cryptocurrency

The cryptocurrency world is in hot and volatile water again with Bithumb, the world's sixth most active crypto trading platform declaring that hackers stole 35bn in crypto cash (that's a Dollar value of $31.6m) 'overnight' last week. This is the second time in a week that South Korean crypto-currency exchanges have been attacked, with Coinrail being last week's 40bn crypto-coin victim.

This has obviously had a knock-on effect in other digital currencies with Bitcoin, Ethereum and Ripple all experiencing a significant drop, from the moment the Media reported the news.

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Bithumb has halted all withdrawal and deposit facilities for the time being and is offering full compensation for any losses, implicitly suggested that the security breach was due to an internal error. This could also hint towards a new status quo response to crypto hacking attacks which by mid-2018 are fairly common place.   

With these incidents become less and less astonishing, we ask ourselves why do the investors keep on coming back to crypto? Digital currency trading continues to be extremely popular and investors eye the upcoming ICOs with the intent to invest and invest large.

For all the media hype around Crypto market nose-dives and government promises to destroy those who dare to decentralize, we have pretty much accepted that digital trading isn't gong anywhere.

This is because there are simple truths about Cryptocurrency that not only show a future for digital tokenization but that it may become integral to the economic landscape.  

5 Simple truths about Cryptocurrency:

1. Cryptocurrency attracts fake news.

Apart from dramatizing trends in Digital Currency way beyond what could be reasonably true, there are countless examples of fake news that have had an impact on the digital currency networks.

It's easy to say that digital currencies are plummeting or surging when you can manipulate the figures based on local popularity of the coins/token (a 10% drop in Bitcoin trading in the USA is hardly of the same real volume as a 10% drop in the Faroe Islands). This is not to suggest that the arket isn’t volatile, just that media is consistently hyped about the volatility.

Social networks and media outlets have a huge role that they could responsibly play in assisting the development of Digital Currency, currently, this isn’t the case.  With the ability to detect, bad players and scams early on, the media is and will be critical to Cryptocurrency's future success.  

2. Cryptocurrency is currently experiencing an internal conflict.

The Blockchain is a big issue. The development of open source vs closed and privatized protocols for the Blockchain is spurring ongoing debate for the essence of the industry.

Tied up in security worries, if open source becomes unappealing enough, closed source will take over and the freedom of the Blockchain that has attracted so many for so long will be severely capped and regulated.  Although the digital part shall remain, the decentralization will eventually die off – which some traders couldn't care less about.

3. Trade isn’t always Fair

There are investors who attempt to exaggerate / manipulate the price of crypto tokens.

Most of the time these are "pump and dump' schemes rings. These operations work by inflating a price of a less popular token by spreading a lot of fake news about its success.

Pumpers buy up tokens with a small market cap and low circulation.  They do this in groups and this will cause the price to rise. They then sell off to new unsuspecting investors causing the price to 'dump'.

4. Investors aren’t interested in the evolving Ecosystem.

Investors may be interested in the concept, security token promises, but chances are they are just looking to make a serious turnover, fast. This applies to traders too who are unlikely to ever actually use tokens, regardless of what they are meant for.    

This creates a situation where huge investments have been made in ICOs but utility tokens are minimally used or non-existent. This is simply because many tokens were never really expected to get past the ICO stage and investors were simply looking to flip their investment as soon as possible.

Keeping Investors interested in general is going to become increasingly difficult as utility token use is not as widespread at Digital currency enthusiasts believe.

5.  Governments can't kill off Crypto

Governments would love nothing better than cryptocurrency to simply disappear, in the way that the mob makes people disappear.

The American government are trying to hit services, companies and ICOs with SEC regulations and lawsuits and let's not even talk about China. China is trying desperately to make examples of crypto exchanges and individuals who break their myriad of laws.  China may even ban the bitcoin mining activity and force Korea to shut down crypto exchanges.

Yet, there is so much to be gained in terms of taxation, the additional revenue on income earned through crypto or even on every exchange (less reasonable) would be phenomenal.