Risks in the cryptosphere and how eToroX confronts them
Crypto is still viewed by many as a risky venture, partly due to public ignorance of how the underlying blockchain technology works. Media coverage of crypto has focused more on the risks of crypto than its established or potential successes; and not enough time has passed yet for the concept of crypto to embed itself in the psyche of a public used to the traditional way of doing things.
That said, there’s room for improvement in the cryptosphere. Not all the concerns are entirely unfounded, and one of the best ways to win over new users is to improve crypto itself, thereby convincing the world that it is both safe and transformative, and a necessary technology that everyone needs.
There are very real risks still being grappled with in the cryptosphere:
Cybersecurity- The entire cryptosphere lives in cyberspace. There are no physical cryptocurrencies you can carry around in your wallet or hide under your mattress. You can’t keep crypto locked in a safe. This means cybersecurity will always be of the utmost importance, even for cryptocurrencies with the highest standards of cybersecurity already implemented. If crypto finally fulfills its potential, more or less replacing the old-world economy, but remaining vulnerable to cyber threats, the entire system could be brought down. In fact, if cybersecurity isn’t kept as a top priority for developers, hackers could well derail the entire project.
Volatility- Cybersecurity happens behind the scenes. For most users, volatility is a much more present concern. The violent ups and downs of Bitcoin have made some wealthy and has conversely taken away great wealth from others. These cases have been prevalent in the media and demonstrate that crypto still has some developing to do before it can evolve into a truly stable market, with long and steady periods of prosperity and growth. In theory, crypto markets become more stable the more people use them, but the necessary users won’t choose to move into an actively volatile environment﹘a self-defeating loop that needs to be broken.
Lack of knowledge- Many people are staying away from crypto because they simply don’t understand how it works. For those untrained in technology and familiar with the current financial system, crypto is a difficult concept to grasp at first, creating a significant entry barrier. What’s more, even crypto traders who know something about the fundamentals of blockchain sometimes struggle to make well-informed decisions with their holdings. Perhaps greater technical knowledge would be useful, but not everyone — certainly not the general public — has the time or expertise to dive so deep.
These three risks pose a significant barrier to the mass adoption of crypto, and providing solutions to these risks could go a long way in making crypto a more popular and viable choice. eToroX wants to be a part of that process. That’s why our exchange and wallet, as well as the company as a whole, are built to help tackle some of these core issues.
Here are some of the things we focus on to encourage mass adoption by mitigating risks in the cryptosphere:
Regulation- eToroX is one of the first regulated exchanges and wallets on the market. In some ways, regulation could be seen as the antithesis of a decentralized environment, but the right regulation, with enough flexibility and a soft-enough footprint, brings many benefits to the cryptosphere. Regulation helps protect both crypto users and crypto entities by ensuring that best practices are being followed, and by creating a framework for stable, steady growth, rather than a quick boom followed by an even faster bust. Regulation also helps make partners of governments and other institutions with a significant interest in the success of the crypto experiment.
Greater security- Regulation actually also helps bring greater security to the cryptosphere, by stipulating specific security standards, and requiring that entities like ours keep cybersecurity at the top of our list of priorities to protect users.
Fiat and crypto compatibility- One of the keys to winning over new users is making traditional currency easily compatible and tradeable with crypto. We accomplish this on our exchange, by offering stablecoins that act as the virtual equivalent of USD, GBP, EUR and dozens of other currencies. This accessibility, together with being user-friendly, is important to help people move into the cryptosphere with confidence, and be able to understand how it works so they can make smart choices for themselves.
Stablecoin- Besides helping to create a link between fiat and crypto, stablecoins also contribute by decreasing volatility in the cryptosphere. Users can now avoid the ups and downs of utility tokens and cryptocurrencies by investing in less-risky stable coins. These are considered less volatile as they are pegged to real-world assets — tangible wealth that everyone it used to. Stable coins reduce volatility in the cryptosphere, while bringing all the benefits of crypto to real-world markets.
Crypto is still a project in development. Those of us who work with it know that someday soon it will change the way things are done. In the meantime, there are finer technical points that need to be ironed out and improved. eToroX hopes to play a role in this movement by building trust and creating a friendly environment in the cryptosphere.
