The risks of virtual currency investment have increased dramatically, so we need to be more vigilant

For some enthusiasts who have been tracking and researching virtual currencies for a long time, investors with a certain risk tolerance can invest an appropriate proportion of funds. However, for ordinary investors who lack sufficient knowledge of this type of virtual currency, it is not recommended to invest or invest in a small amount.

Since the advent of Bitcoin in 2009, it has attracted widespread attention from the society. Recently, many other virtual currencies have emerged on the market based on Bitcoin, such as Litecoin, Ripple, Bitcoin, Dogecoin, etc. These virtual currencies are often limited in total amount and scarce, which has aroused the investment interest of investors.

Is it worth investing in this type of virtual currency, and how to invest? Wacai Research Institute pointed out that since virtual currencies such as Bitcoin are not issued by monetary authorities, they are not real currencies and cannot be circulated and used in the market. Previously, the central bank also clearly defined Bitcoin as a virtual commodity, and investors participating in the sale of such commodities must bear their own risks. Therefore, Wacai Research Institute believes that for some enthusiasts who have been tracking and researching virtual currencies for a long time, investors with a certain risk tolerance can invest an appropriate proportion of funds, while ordinary investors who lack sufficient knowledge of this type of virtual currency are not recommended to invest or invest in small amounts.

Regarding how to identify criminals who use this type of virtual currency to implement financial network pyramid schemes, such as the Markcoin financial network pyramid scheme defined by the police some time ago, the Wacai Research Institute pointed out that for this type of financial network pyramid scheme, the source of investors' income must be identified first. If the income is mainly earned by introducing other investors (downline investors); secondly, exaggerating the publicity of small investment, large returns, and waiting for high returns, etc., this basically has the characteristics of a pyramid scheme. At this time, investors should be highly vigilant.

In addition, the Bitcoin trading market has a small capacity, trading is open 24 hours a day, there is no limit on price fluctuations, prices are easily controlled by speculators, resulting in violent fluctuations, great risks, and high speculative risks. At the same time, the relevant Bitcoin trading market is still in a spontaneous state, and there may be counterparty risks, fund security risks, and risks in the clearing and settlement links, etc., and it is difficult for investors' legitimate rights and interests to be effectively protected.

However, it is worth noting that the central bank previously affirmed the far-reaching significance of digital currency in a digital currency seminar held in Beijing. The Wacai Research Institute believes that the digital currency mentioned by the central bank is fundamentally different from virtual currencies such as Bitcoin. First of all, virtual currencies such as Bitcoin do not have a unified and centralized issuer, but are randomly generated based on an algorithm, which means that anyone can generate Bitcoin, while the digital currency mentioned by the central bank is issued by the central bank, and the issuance right is firmly controlled by the central bank. Secondly, similar virtual currencies such as Bitcoin often have a limited total amount, while the central bank's digital currency can issue a certain amount of digital currency in a timely manner according to the economic form and the needs of currency circulation, without being restricted by the total amount. At the same time, the scarcity of Bitcoin's virtual currency and the difficulty of "mining" are constantly increasing, resulting in its currency value becoming higher and higher. As a national currency, the central bank's digital currency will try its best to maintain its own stability in terms of currency value, and will never be priced according to its scarcity. Moreover, the central bank's digital currency will not be used in a geographically restricted manner like Bitcoin.