As you are using steemit I am 100% sure that you know about cryptocurrencies. In January 2017 price of bitcoin was near $1,100, at same year in December its price is near about $20,000. That was the massive growth, no investment can give such returns which nearly 1400% increase in just one financial year. Everything seems good but things are not always good they have some pro and cons. This year within in six months bitcoins has lost $15,000 in value, Nowadays bitcoin's price is in between $6000 to $7000.
Same is with other currencies, like Etherium, Litecoin, Ripple, Bitcoin cash. they all rise suddenly and fall. Few people made a good amount of money in last and few were suffering huge loses. Despite everything, these cryptocurrencies going to be part of our life in near future. but still, there are few problems with these cryptocurrencies.
Lets me point you few of the biggest problems in cryptocurrency market today:
- Pumping and dumping:
ICO( initial Coin Offering) I am not talking about, what they really do, enterprise behind these ICOs heavily invest on a particular coin and ask their investor to investors to invest on that coin, once the price of that coin rise, they cash out their money and left the investors with no value or little value.
- Hackers:
Yes! hackers are the biggest threat to cryptocurrencies, they have been looking for loopholes and falts in cryptocurrency exchanges. Lack of security in systems leads hacking of bitcoin. Hacker stole near about $30M of worth bitcoin from Bithumb exchange last month in South Korea. Another problem is that transaction in blockchain are irreversible.
- price instability:
Stability is the biggest issue for the investor, cryptocurrency price keep fluctuating rapidly. One can't analysis the price of cryptocurrencies in their chart so it becomes very difficult to make strategies for investment. Price of different cryptocurrencies may be varied in different exchanges.
This a graph which tells how much bitcoin fluctuate.
- Excessive volatility:
Cryptocurrencies price can fall and rise dramatically within a day. When your investment gives negative returns of around 50% within 24 hours is known as a highly volatile asset. So it becomes highly risky for investors.
These are the few which I think the biggest problems cryptocurrencies. Please share other points which you think they should be on this list. Please comment below your opinion.