Crypto, Understanding crypto and its Risks

Although no longer a new topic, discussions about crypto assets have been growing steadily in recent years. This skyrocketing popularity is partly due to the many international influencers promoting their chosen tokens as future investments. The uniqueness of crypto assets is often touted as a factor that can generate significant returns for investors. However, behind these benefits, there are risks that deserve a deeper understanding. So, what exactly are crypto Assets.

Understanding and Functions of Crypto Assets

Generally, crypto assets, or cryptocurrencies, are digital currencies. Their primary purpose is to serve as a medium of exchange for online transactions. Regarding security, cryptocurrency transactions, whether buying or selling assets or using them, are protected by cryptography or secret codes.

The Development of Crypto Assets

Historically, cryptocurrency has actually been developed since 1983 by David Chaum in the United States. At that time, David Chaum introduced cryptographic electronic money, which only became available in 1995 with the creation of Digicash. However, at that time, transactions required specialized hardware and software, which limited its use.

It wasn't until 2009 that Satoshi Nakamoto introduced Bitcoin as the first decentralized cryptocurrency. This allowed his creation to be used across multiple platforms without requiring any special devices except an internet connection. The currency's widespread acceptance on various digital platforms paved the way for the emergence of other crypto assets, which continue to this day.

Crypto Asset Risks

Although considered secure with a cryptographic security system, crypto assets as an investment instrument still carry their own risks. These risks were outlined by the Financial Services Authority based on reports from national media outlets. The explained that cryptocurrency values are volatile and uncontrolled. This causes fluctuations in their value that can occur at any time and without clear reason. Furthermore, the does not supervise or regulate crypto assets. Indonesians should understand these risks before making large investments.

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