How is Crypto Manipulated & Approach on Preventing It

What is Cryptocurrency?

Cryptocurrency is a digital or virtual asset that uses cryptography for security. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services.

In short…

• A form?of electronic money or asset?that goes up or down in value based on what the general public is willing to pay for it.
• They?store value?of an asset digitally to exchange goods and services. For example, it can be used for buying clothes on Amazon (coin in exchange for a product), homes (coin in exchange for an asset) or sending money to your mother (peer-to-peer service like CashApp, Venmo, Zelle)
• They are “decentralized” or are not subject to regulation by banks or governments?and as such are to be used as the “currency of the people”. Example — If 10 million people all over the world believe that the “Banana” currency is worth $10 because of whatever cause, and begin using it to buy, let’s say a TV from Best Buy online as they accept the coin as a form of payment, that is?what the coin is worth?(no government or bank involvement needed).

Why is it Important?

Cryptocurrencies are important because they represent a new way of conducting financial transactions.?Cryptocurrencies are based on blockchain technology, which is a distributed ledger system that allows for secure, transparent and tamper-proof transactions.

They give us a new way of storing and transferring value that is not subject to the traditional financial system.?This offers unprecedented opportunities for businesses and individuals to transact without the need for third-party intermediaries like banks or governments. Additionally, cryptocurrencies?are often volatile and can be quite risky investments, but they also have the potential to make huge returns. For these reasons, it’s important to understand what cryptocurrency is and how it works before investing any money in it.

There are many reasons why cryptocurrencies will impact everyone. Some of the basic reasons include:

• ·?Increased privacy and security?— Cryptocurrencies are anonymous, meaning that transactions are not linked to a person’s name, but rather to a unique cryptographic key. This makes it difficult for anyone to track your financial activity. Additionally, cryptocurrency networks are decentralized, which means they are not subject to hacking or fraud.
• ·?Lower transaction fees?— Cryptocurrencies are often used to send money internationally, and the transaction fees are typically lower than those of traditional banks.
• ·?Borderless?Accessibility?— Cryptocurrencies can be accessed by anyone with an internet connection. This makes them ideal for people in countries where banking infrastructure is not well developed.
• ·?Faster transactions?— Cryptocurrency transactions are typically much faster than those of traditional banks.
• ·?Hedge against inflation?— Cryptocurrencies are not subject to inflation, meaning that their value will not decrease over time. This makes them a good investment for those looking to hedge against inflation.
• ·?Power Shift?— Provides means on putting the power of commerce and global trade in the hands of the people and away from governments & banks (no reason to print money and no reason to regulate it as the technology provided by blockchain does that automatically)

Cryptocurrencies have the potential to impact everyone, regardless of whether they are invested in them or not. They have the potential to revolutionize how we interact with the financial system and could have a significant impact on the global economy.

How is Cryptocurrency Exploited Today?

There are a few different types of exploitative manipulations that can occur in cryptocurrency systems. Here are a few examples:

1) Pump and dump schemes?— This is when someone buys up a large amount of a particular cryptocurrency, then artificially inflates the price by promoting it to others. Once the price reaches a certain point, they sell their holdings and make a profit. This type of manipulation can be very damaging to the market as it can cause prices to spike and crash unpredictably.

2) Mining cartels?— A mining cartel is a group of miners who work together to control the majority of the hashing power on a network. By doing this, they can effectively control which transactions get confirmed and added to the blockchain. This can be used to manipulate prices or to censor certain types of transactions.

3) 51% attacks —?A 51% attack is when a single entity or group controls more than 50% of the mining power on a network. This gives them the ability to double spend coins, reverse transactions, and basically do whatever they want. This type of attack can be devastating to a cryptocurrency and its users.

4) Ponzi schemes?— A Ponzi scheme is a type of investment scam where people are promised high returns for investing in a new project or venture. However, the people running the scheme actually use the money from new investors to pay back old investors, instead of investing it in the new project. This can go on for a while until the scheme eventually collapses, leaving the new investors with nothing.

5) Exit scams?— An exit scam is when a cryptocurrency project or exchange suddenly shuts down and disappears, taking all of the money with them. This type of scam is becoming more common as the industry grows.

6) Fake news?— Fake news is a type of misinformation that is spread through social media and other channels. It can be used to manipulate prices or to discredit a particular project.

7) FOMO?— Fear of missing out is a psychological phenomenon that can drive people to make impulsive decisions. In the context of cryptocurrency, it can cause people to invest in a project without doing any research, on the fear that they will miss out on the next big thing.

8) Shilling —?Shilling is when someone promotes a particular cryptocurrency project, often without disclosing their financial interest in it. This can be done to manipulate prices or to simply pump up the price so that the person can sell their holdings at a profit.

9) FUD?— Fear, uncertainty, and doubt is a type of psychological manipulation that is often used in the cryptocurrency world. It involves creating negative sentiment around a particular project in order to drive down the price so that the person can buy it at a lower price.

10) Whales?— A whale is an individual or group that owns a large amount of a particular cryptocurrency. They can use their power to manipulate prices or to make decisions that benefit them at the expense of others.

These are just a few of the many different types of manipulation that can occur in the cryptocurrency world. It’s important to be aware of them so that you can make informed decisions about which projects to invest in.

How to Prevent Exploitive Manipulations in Crypto?

To prevent exploitative manipulations in cryptocurrency systems, we must first understand how these systems work. Cryptocurrency systems are decentralized, meaning that there is no central authority overseeing the economy. Instead, the network of users all handle transactions and mining together. This lack of centralization can be exploited by those with malicious intent.

To protect against these kinds of attacks, we need to have a robust system in place that can detect when someone is trying to exploit the system. We also need to have a way to quickly and efficiently punish those who are caught red-handed. These measures will help to keep the system fair and prevent it from being manipulated for personal gain.

• Implement a system that can quickly detect and punish those who are caught trying to manipulate the system.
• Educate users on how to spot and avoid exploitative manipulation.
• Promote transparency and accountability within the community.
• Encourage users to report any suspicious activity.
• Cooperate with other projects and exchanges to share information and improve detection of manipulative activity.

These are just a few of the things that can be done to prevent exploitative manipulation in cryptocurrency systems. By taking these measures, we can help to keep the system fair and ensure that it is not used for personal gain.

What is your opinion on this topic? Let me know in the comments below!

Disclaimer

I cannot express strongly enough that you should use caution with the information supplied. I am not a professional financial adviser nor a fortune teller than can predict your circumstances or future. The data provided is meant to help individuals learn and adapt it for their own use, however it won’t always apply in every use case. I can confirm that these strategies have been extremely profitable in my personal life, contributing to my professional success.