In addition, some crypto-currencies have slow transaction speeds and/or high transaction costs. In some ways, crypto-currencies can do this – as buyers and sellers can use crypto to pay for goods and services but only in limited situations. Medium of exchange -A medium of exchange means it should facilitate buyers and sellers to make transactions.The volatility of crypto-currencies makes it difficult to use as a unit of account. This allows us to compare them to each other. Unit of account– A unit of account means that the money should allow us to easily form an understanding of the value of goods and services.Due to large fluctuations in value, this is not the case for crypto-currencies. Store of value– To be a store of value, a currency should be stable over time.A well-functioning currency has the following three functions:Ĭrypto-currencies are, therefore, not suitable for the following reasons: You should be aware that crypto-currency is not considered to be suitable for everyday use. These are often on social media, where influencers are being paid to advertise crypto. In particular, you need to be aware of the risks of misleading advertisements. In March 2022 the Central Bank of Ireland warned about the risks of investing in crypto, This was part of a European-wide campaign by the European Supervisory Authorities. You can also convert your crypto-currency into standard currency using a crypto-exchange. You can use it to buy goods and services that accept crypto-currencies, however, this is not very widespread. In general, most people buy and hold crypto as an investment. Incentives for you to invest more money.Lack of access to the currency you have bought.Significant restrictions around cashing in your currency.Other types of scams related to crypto-currencies could involve The value of the currency falls and initial investments are wiped out. The currency may not launch at all or it could launch and then the developers walk away from the project. An ICO is a way of crowdfunding the launch of new currencies or companies. ICOs are not regulated and could turn out to be scams. You should also be wary of fake “initial coin offerings” (ICOs). You should be suspicious of any kind of crypto that encourages you to recruit people. Promoting or participating in a pyramid scheme is illegal under Irish law. These scams focus on people recruiting friends and family to invest in the crypto. Consider adding two-factor authentication to your account to increase your level of security. They can then log into your account and remove funds.
This is when scammers steal email addresses and passwords. Ensure anywhere you store the login is secure. Never share your login with anyone under any circumstances. This is usually done by gaining access to documents on your laptop, emails or cloud storage. This happens when scammers get your login details and gain access to your funds. Beware of social media ‘influencers’ who may be paid to talk about certain types of crypto and so may be biased. Social media ads may be very short, and focus on the potential gains but not the high risks involved. Here are the most common scams to be aware of:Ĭrypto is often advertised in an unclear, incomplete, inaccurate or even misleading way. Be very careful of potential scams when it comes to crypto.
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