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Is Bitcoin safe? See how to invest safely

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Bitcoin has become a very interesting investment option, attracting a large number of people who have never had contact with the stock market before. But along with this interest came many doubts, mainly regarding the safety of this asset. Therefore, in this content you understand if Bitcoin is really safe. See best apps to buy crypto in USA

This is a justifiable doubt, after all, Bitcoin is still a very new technology and it generates some confusion. On the other hand, it should be noted that this is one of the most solid and mature currencies in this universe.

What is Blockchain

Before we explain the reasons why Bitcoin is secure, precisely to make sure that everyone knows what Blockchain is . Blockchain, which can be translated as a chain of blocks, guarantees the entire operating basis of Bitcoin and all other cryptocurrencies . The main technological advance that this solution brought was the decentralization of information and operation of the entire network.

This network is formed by a large number of “nodes” that validate operations and receive bitcoins as a reward, something called mining . This whole structure guarantees that the BTC network will never be vulnerable to attacks that can affect centralized servers, such as DDoS attacks (Denial of Service Attack).

Each node in the Blockchain is an important part of the network, but if one is turned off, the computational power continues to be guaranteed by the other miners still connected. As long as there is an active node, the Blockchain remains.

Decentralization is also a guarantee that no transaction can be undone or manipulated , and that no one can counterfeit coins or even use the same Bitcoin twice.

In terms of technology, the Bitcoin Blockchain is one of the best examples of security for protecting data and values. And even today there is a team that proposes and implements new features and fixes bugs that are found.

Bitcoin security and its cryptography

In addition to the Blockchain, Bitcoin is secure because of its cryptography, which despite being over 10 years old, is still a great example of security and complexity. Bitcoin has different levels of encryption, mainly one for the mining (Sha-2) hash and one for each wallet’s private keys.

In theory, if someone manages to hack Bitcoin’s cryptography, the hacker could steal values ​​or even manipulate the amount of coins on the network. But, to give you an idea of ​​the cryptocurrency’s security, for someone to be able to carry out a brute force attack on the Bitcoin network would take about 300 years, and it would cost over US$480,000 per hour to carry out, making any attempt unfeasible.

This is still an optimistic estimate, with many saying that the time for such an attack would be infinite.

Even the quantum computing that “could crack Bitcoin’s cryptography” is still an experimental technology. As this type of computer becomes more powerful, Bitcoin’s security protocols will have evolved , along with its encryption, increasing the difficulty even for this new form of computing.

But let’s understand more calmly what can be understood as a currency investment risk and whether it is a valid risk or not.

What are the risks of investing in Bitcoin?

It is important to talk about some possible investment risks, which certainly cross the mind of every investor. In general, there are risks related to Bitcoin that are inherent to any type of investment, such as the risk of not obtaining the expected return , or of carrying out an operation at the wrong time.

1. Buying Bitcoin at the wrong time

As Bitcoin is a variable income asset, you need to know when to buy the asset. Those who bought Bitcoin in its high history in 2017 and 2021 ran the risk of not being able to obtain the desired profit yet, and are waiting for a new appreciation of the currency. However, bearish moments are fundamental for the market, after all, it is possible to buy at a lower price and considering that, most likely, the asset will increase in value over time.

2. Loss of value

The cryptocurrency also depends on the public’s interest in buying it, so there is a chance, even a remote one , that it will lose value in the future. Just like any other asset or investment, everything is liable to become obsolete or lose public interest, as society reinvents itself and creates new opportunities.

3. Price manipulation

Another risk that should be mentioned is the possibility of price manipulation. Large entities with large amounts of BTC can dump coins into the market or buy a large amount for the price to go up or down. Many investors warn of the manipulative behavior of Elon Musk, CEO of Tesla and Space X, who is also a big admirer of cryptocurrencies.

Often, the billionaire, who is one of the richest men in the world, moves his social networks and causes an uproar in the crypto universe. It is important to pay attention to behaviors like these and to have the malice to perceive when the company, or influential personality, may be manipulating the market.

However, recently this has become more difficult, as the market is diluted to different levels, with fewer “whales” trying to manipulate the market.

Below we will discuss some other risks that may cross the mind of the investor and that clarification is necessary so that you have, more and more, knowledge and fundamentals to understand the security of Bitcoin.

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Gadget Flair
Gadget Flairhttps://gadgetflair.com
GadgetFlair is a tech driven website with the sole aim of proving tech contents for everyone searching for latest technology news and devices specifications with prices in the USA and worldwide.
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