If you spend most of your time reading Bitcoin news on the exchanges, you’re not as informed as you think. You may know everything about new Bitcoin wallet developments, but there’s more to the industry than that.
Here are five dirty little secrets you may not know regarding the world’s leading cryptocurrency in 2020.
Email Bitcoin Scams
Various governments do their best to impose regulations in the cryptocurrency sphere. Yet it’s still easy enough to remain anonymous as a crypto user.
You’re familiar with ransomware and online blackmailing. In 2020, more and more people are getting targeted by crypto scammers. Users that threaten to release sensitive information about the victim, unless they make a transfer to a Bitcoin wallet address.
Receiving such an email doesn’t mean you have a system infected with ransomware or other malware. But it’s a scary thought nonetheless.
The Bitcoin industry still allows for a variety of illegal activities carried out through the use or theft of the cryptocurrency. One thing you can protect against is a direct theft of your crypto assets. As long as you use a secure Bitcoin wallet, preferably a paper or hardware wallet.
Crypto Investment Scams
The Covid-19 outbreak gave birth to an increase in scams that affect the crypto world as much as the traditional financial system. It’s perhaps no surprise that there are many investment scams out there.
Individual scammers and groups try to profit from the outbreak. They attempt to sell Bitcoin users fictitious services, medical devices, or other goods. Including opportunities like selling them on inexistent remote work jobs.
This isn’t something you hear on exchange market blogs and forums. And it’s also not something that seems to affect the Bitcoin price as much as it probably should.
The downside? There’s no insurance on losing your crypto assets as a result of a fraud or scam. So, before you open your Bitcoin wallet, make sure you can confirm the claims. Things that sound too good to be true in a time of economic turmoil are likely scams.
Earlier this year, Bitcoin saw a massive loss. Estimates put it at around 10 billion of its total market value. What’s interesting is that there seems to be a correlation between the drop in value to early-stage investors moving massive amounts in a short amount of time.
Some tokens were reportedly valued at around $500,000 and they haven’t moved in years. According to eToro market analysts, it’s unclear if the Bitcoin founder himself may have had a hand in this as well.
What is clear is the fact that for a few months there was a massive discrepancy in supply and demand. Of course, there’s always the simpler explanation. Early stage investors got scared and decided on cashing out before Bitcoin’s value plunged further.
The Third Halving and the Increase in Value
After the second Bitcoin halving, the coin eventually reached an all-time high of roughly $20,000. Granted, it only happened 18 months after the halving itself.
Some market analysts estimate that Bitcoin may once again reach the same value. If not higher, after this third halving from May 2020.
That said, Bitcoin already saw a massive drop in value before the halving. It also struggled to hit $10,000 after the event.
Statistics are hard to trust in reference to the halving events. For example, the first halving from 2012 saw an appreciation of 9,200% of the coin. The 2016 halving only saw an appreciation of 2,900%.
The demand for Bitcoin needs to increase dramatically for anyone to see the cryptocurrency reach new all-time highs. Until then, the crypto in your Bitcoin wallet may fluctuate around the $9,000 mark for much longer.
Individual Miners Go Extinct
Set aside the ridiculous prices of new Bitcoin mining equipment, it’s nearly impossible for individuals or small groups of miners to remain relevant. Old mining equipment is very hard to sell these days.
Especially since new mining equipment like the S19 ASIC series from Bitmain offers hash rates of 110TH/s. Along with very good energy efficiency compared to old BTC miners.
Antminer S19 rigs sold like freshly baked bread months before the halving. It’s difficult to imagine small-time miners staying afloat in the near future. Once that happens, large mining pools may dominate the market and set whatever transaction fees they want.
The Controversy Doesn’t Make Bitcoin a Bad Investment
At the end of the day, Bitcoin remains the most relevant cryptocurrency. Although there are plenty of controversies associated with the digital currency, it’s still attractive to investors and crypto users.
Yet, it’s best to stay informed on what affects the market value. As well as how to keep your crypto assets secure from the newest scams.