The rewards — the upside
Big profit potential
Some people have made extraordinary amounts of money by buying cryptocurrencies early and holding on. Bitcoin was worth less than a dollar in 2010; it has since reached tens of thousands of dollars.
You control your money
Crypto lets you send, receive and store money without a bank or middleman. No one can freeze your wallet or tell you what to do with it.
Global access
Anyone with an internet connection can use crypto — even in places with limited access to traditional banking. For people sending money to family overseas, crypto can be faster and cheaper than a wire transfer.
The risks — the downside
Price swings
Crypto is sometimes very volatile. Prices can jump or crash in a single day. Never invest more than you can afford to lose entirely.
Scams and hacks
If you lose your password or fall victim to hacking, there is typically no way to recover your money.
In traditional banking, security rests with the institution. In cryptocurrency, the responsibility for security rests entirely with you.
Security measures to take
- Use strong, unique passwords for every account
- Enable two-factor authentication (2FA) on all crypto accounts
- Keep your software and devices updated with anti-virus protection
- Use a hardware wallet for storing significant amounts of crypto
- Never share your seed phrase with anyone, ever
Regulatory uncertainty
Governments around the world are still figuring out how to handle crypto. Laws and taxes can change — and that might affect your investments.
Test yourself
Select your answer for each question, then see if you're right.
Q1. Which is a genuine reward of investing in cryptocurrency?
Crypto gives you direct, self-sovereign control of your money. No bank can freeze your wallet or tell you what to do with it.
Q2. What does 'volatility' mean in the context of crypto?
Volatility describes how much a price moves. Crypto is highly volatile -- Bitcoin has gained and lost large percentages of its value in a single day.
Q3. If you lose your seed phrase and your hardware wallet is stolen, what happens?
There is no bank to appeal to. Without your seed phrase, your funds are gone forever. Secure offline storage is critical.
Q4. Which is a recommended security measure for crypto accounts?
Two-factor authentication means even if someone steals your password, they can't access your account without the time-sensitive code from your phone.