Know The Risks Of Crypto! This Is Cyber Security Expert Alfons Tanujaya's Explanation

JAKARTA - Cryptocurrencies are increasingly popular and loved by many people. In fact, according to data from the Commodity Futures Trading Regulatory Agency (CoFTRA) there are 11.2 million crypto investors in the January-December 2021 period. However, there are some big risks that come with it.

Vaccines Cybersecurity expert Alfons Tanujaya revealed that there are at least five major risks lurking in this digital currency. This was conveyed by Alfons on his YouTube channel on Monday, February 14.

Please note, cryptocurrency is a blockchain-based digital currency. Meanwhile, cryptocurrencies are also used to transact directly peer to peer without any third-party intermediary, which is done online.

Quoted from Forbes, there are three keywords attached to how cryptocurrencies work, namely digital, encrypted, and decentralized. This means that it is not the same as conventional currencies such as the US dollar, the euro, and even the rupiah. Because this digital currency is not controlled by a central authority in terms of the value of the money. Thus, the task of controlling and managing this currency is entirely held by cryptocurrency users via the internet.

The first cryptocurrency on the market was Bitcoin. The coin was developed by a person who uses the pseudonym Satoshi Nakamoto, January 2009. Apart from Bitcoin, there are also several other cryptocurrencies such as Dogecoin, Ethereum, Binance, Tether, Solana, and so on. Crypto price tracking website CoinMarketCap reports that there are more than 17,500 cryptocurrencies currently in circulation.

Five Crypto Investment Risks

Before deciding to invest in cryptocurrencies, you need to be aware of some of the major risks that this digital currency carries. According to cybersecurity expert Alfons Tanujaya on his YouTube channel Alfonstan, there are at least five major risks looming over this popular digital currency. Check out the explanation below.

Very High Volatility

Cryptocurrencies have very high volatility or their value is easy to change quickly. The proof is that Bitcoin as the first and number one currency in January 2021 is worth 40 thousand US dollars or around IDR 572.9 million, in April 2021 the price will be 63 thousand US dollars or 902.3 million, up 58 percent.

However, the value of Bitcoin decreased by 53 percent in July 2021 at 29,800 US dollars or IDR 426.8 million. Bitcoin then rose to its highest value in November 2021 at 69 thousand US dollars or IDR988.2 million and fell again 29 percent one month later.

Alfons also explained that Bitcoin, which is the number one crypto asset, has fluctuations in such a way, many other crypto assets have experienced the same thing. In fact, there are also crypto assets that experienced a sharp increase and then decreased and never rose again.

No Regulator Controls Crypto Assets

There is no regulator that controls these crypto-assets, unlike when you invest in stocks. This is because crypto assets depend on a decentralized blockchain. According to the IT expert, the decentralized nature of crypto will be two sides of a sword. That is, by being decentralized, crypto assets have no control and can be restricted. But on the other hand, if something goes wrong you can't ask anyone for help.

Transaction Cannot Be Canceled

In the absence of a controlling institution, the nature of crypto asset transactions is irreversible. This causes, if a criminal act occurs, such as money laundering or illegal transactions such as buying drugs, or transactions for ransomware payments, the transaction cannot be canceled.

Alfons gave an example, many ransomware makers are caught and their crypto accounts are successfully taken over, transactions that have occurred cannot be undone. This is because it has been recorded in blockchain technology and cannot be withdrawn. The nature of the blockchain which can only transact in one direction, does not allow you to undo transactions that have already occurred.

Complicated And 100 Percent Relying On Digital

Crypto assets 100 percent rely on digital channels in their transactions. You can't rely on passbooks or anything like that because everything relies on digital channels, such as usernames and passwords.

Then, there is a private key and a public key which is the key in crypto transactions. If the private key associated with your crypto asset is stolen, then your crypto asset will be stolen as well and there is no possibility of returning it.

Therefore, when you decide to play crypto, first know how to secure the assets you have. If you are feeling paranoid, it is recommended that you use a cold storage wallet.

If Exchange Is Compromised, Your Assets Will Be Lost Too

Your crypto assets will also be lost if the cryptocurrency exchange or cryptocurrency exchange is hacked. The man explained, if you buy and store your crypto assets on an exchange, when the exchange concedes your crypto assets will also be lost.

For information, hacks on crypto exchanges are very common. For example, PolyNetwork suffered a hack in 2021 and suffered a loss of 611 million US dollars or around IDR 8.7 trillion. Other cases are Coincheck, MTGox, and Kucoin which respectively suffered losses of $547 million (IDR 7.8 trillion), US$480 million (IDR 6.8 trillion), and US$285 million (IDR 4.08 trillion) due to hacking.

Those are the five risks that lurk if you decide to invest with crypto-assets according to Alfons Tanjaya. So, are you still choosing crypto assets as an investment option?