The world is moving towards the digital age and every industry has to adapt accordingly. The financial system of the world has chosen digital currencies as the replacement system for international trading and transaction. Cryptocurrencies are pitted as the primary players in the 21st-century economic revolution. Cryptocurrencies have been available for trade for over a decade but it is only recently that they entered the spotlight. With a system as large as the international financial system, there are bound to be a few fraudulent claims within the crypto ecosystem.
Mainstream Cryptocurrencies Reliability
While mainstream cryptocurrencies are heavily reliable, some off-stream currencies do not exactly check every box in the crypto manual. The Investment Center broker Joe Lewis has isolated the basic factors that define the legitimacy of a cryptocurrency to analyze the extent of fraudulent claims in the crypto ecosystem. After extensive research, the factors have been narrowed down to the infrastructure of the cryptocurrency itself.
Cryptocurrencies are designed using an open-source platform. Anyone can make their cryptocurrency. However, a cryptocurrency can only go mainstream if it has the trust and support of major financial firms. This doesn’t mean that every cryptocurrency that exists out of the mainstream sector is unreliable since every cryptocurrency has to start somewhere. So to differentiate between the good and the bad the primary aspect of each factor is set as transparency. This allows independent users to determine whether the currencies and the platforms they are using are trustworthy. Some platforms commit fraud by allowing users to use mainstream crypto but might extort them in the long run.
The beauty of crypto is even though it is decentralized. It is only considered a viable currency if every industry related to the financial system acknowledges its existence as legitimate. When it comes to trading platforms, it is a little difficult for users to figure out if their platform of choice is extorting them. A trustworthy trading platform will provide the necessary firmware required to access the cryptocurrency blockchain. However, a fraudulent platform might not even support the cryptocurrency. They might only be trying to take advantage of the hype surrounding mainstream cryptocurrencies.
Another thing to look out for is unidentifiable cryptocurrencies. While it is true that a majority of cryptocurrencies have yet to enter the mainstream market, there is a list of industry-verified cryptos that are considered legal. If a platform offers support for unknown crypto that is not supported by any other platform then it is best to stay away from these platforms as a safety measure.
A cryptocurrency is practically worthless without a blockchain network. The very idea of cryptocurrencies stemmed from a decentralized system. That does not require the need for a third party to verify any transaction between two parties. This is done using the blockchain network. A good trading platform won’t just tell you about the crypto coin available as an asset but will also provide a detailed description of the blockchain it is based on.
Fraud platforms will simply just ignore the blockchain altogether or will mention a blockchain network that is simply different from the crypto coin it supports. As a trader, you will need insider knowledge on which cryptocurrency is supported by which blockchain.
In the end, it all comes down to the pros and cons of distribution. Cryptocurrencies provide more advantages and are a necessary step in the right direction to advance humanity’s future. There will always be a few bad apples within a financial system but all in all, crypto is on track to replace the centralized trading system in the coming years.