Bitcoin is like a symbol of virtual currency. But no investment is 100%. Isn’t there a lot of people who are worried that even Bitcoin may lose its principal?
What is Bitcoin?
Bitcoin is the world’s first blockchain-based coin. When it comes to virtual currency, many people think of Bitcoin. Bitcoin is the key currency in terms of legal tender. Currently, Bitcoin is not only the most well-known crypto asset in circulation, but also the transaction volume is overwhelming.
Bitcoin uses a technology called blockchain for transactions. Blockchain is a bitcoin transaction technology that acts as a ledger that summarizes the records of bitcoin transactions. It is called a blockchain because it manages transaction data called transactions in blocks and distributes them as a single chain.
there is no central bank
Bitcoin does not have a state or central bank. It is a coin with a high degree of freedom that does not receive intervention from the state or central bank.
Upper limit on the number of issued
Since the birth of Bitcoin, the number of coins issued has been set at 21 million. In the case of Bitcoin, there is no central organization to manage it, so if it is issued carelessly, there will eventually be too many Bitcoins in the market and the value will decrease. There is a pre-determined maximum number of copies.
send money worldwide
Bitcoin can be sent 24 hours a day, 365 days a year, wherever you are. This is not limited to any country or region. You can send money no matter where you live in the world. International remittances through traditional banks are affected by bank business days. This is also very convenient.
Loss of principal in cryptocurrency investment
Loss of principal in virtual currency investment means that a negative amount will occur more than the original funds. Specifically, there are the following reasons.
Loss is greater than invested capital
In cryptocurrency investments, which fluctuate in value, trading may result in a loss that exceeds the funds at the time of investment. Virtual currencies are more liquid than fiat currencies. So things like this can happen.
too much leverage
The case of over-leveraging and losing big money is not only virtual currency, but also the exchange market. Leveraged trading is a mechanism that allows you to trade dozens of times the funds with the margin as collateral. There are big returns and big risks.
Hacking incidents of virtual currency exchanges are happening frequently. Cases of funds disappearing due to exchange hacks are common, even on famous exchanges. It is happening on exchanges all over the world, and if your virtual currency is stolen, you will of course lose the principal.
Bitcoin may lose its principal
As mentioned above, it will be case-by-case, but even with the most stable coin like Bitcoin, if you make a mistake in how you invest, you will carry the risk of losing the principal. So make sure you don’t misunderstand how it works. We recommend using a secure virtual currency exchange. In that sense, Bybit is very safe. Security measures are also solid at the world’s top 10 exchanges.