Effect of Crypto scams so far
To what extent have Crypto scams affected the Crypto space?
Firstly and the most common effect is that scams ripped people off their funds and leave them in an unstable psychological state.
There are other effects of scams in the cryptocurrency space, and that is the reduction in mass adoption rate, upcoming promising crypto projects finding it difficult to grow and also it has enhanced in-depth research in projects.
It reduces the rate of mass adoption. One of the major aims and targets of cryptocurrency is to ensure mass adoption. Mass adoption is the process whereby the majority will have the ideology of how cryptocurrency works and how it can really benefit their financial life. For example, An investor who is about showing interest in cryptocurrency and in a specific project and later discovering that the project he has believed in is not genuine. These findings will be very devastating, which might eventually kill the interest in the whole of cryptocurrency.
Upcoming promising crypto projects finding it difficult to grow. Because of the crypto scams, a lot of people who have been victims of such cases will be scared to invest in another small project because of the fear of "What if". Some investors who could have shown interest in such promising upcoming projects would prefer to invest in a less risky project that is well known and that has gained ground through a huge market capitalization and also among the top listed coins. This as a result will affect small upcoming crypto projects who have potentials.
- Increases the willingness of doing indebt research in crypto projects
This is a good growth effect in the cryptocurrency space which was partially enhanced by the crypto scam. The majority of investors and traders get to know about cryptocurrency analysis because of fake crypto projects who have mixed up with real crypto projects. With the help of fundamental and technical analysis, deep research can be done to understand all about a specific crypto asset. Once bitten, twice shy. This is why some people went into doing in-depth research and digging more about a specific crypto project they are willing to invest in. Since they have been once scammed, or someone they know has been scammed, therefore, they want to prevent a reoccurrence of such.
Will regulations in Crypto add value to the Crypto space?
Regulation can be effective through a control body and once that is done in the crypto space, the major characteristics of decentralization will suffer the effect at the same time.
Although, If there could be regulation in the crypto space, a lot of changes will happen and that would be of great experience for users.
Positive effect of regulations in crypto space
It will boost the level of trust: This will help investors to be assured there won't be much of an issue regarding their investments since there will be regulations guarding the affairs.
It will minimize the level of risk: Investors can easily think of going any miles in their investment decisions since almost all crypto projects will be less risky, at least they are sure that there is a regulatory body.
Scammers can be easily be apprehended, illegal transactions can be tracked, and fraud will be minimized: Users personal data will have to be monitored and observed if regulations should come to the crypto space, and individuals who have a good image to protect will not be involved in any illegal activity.
Negative effect of regulations in crypto space
It will be the end of anonymity and privacy: Regulators will like to monitor all affairs and to be effective enough in their operations, users' personal data will be needed.
Decentralization feature of the crypto world will be altered: There will be a central body that governs the affairs and ensure that rules are strictly followed. This isn't the way of decentralization.
Limitation to how freedom is been exercised: Fear of getting into trouble or been monitored by the regulators will bring limitations to how people freely perform all their activities in the crypto space.
In a nutshell, regulations in Crypto can add value to the Crypto space but at a significant cost which might be way higher than the value that decentralization stands for.
This is @benie111
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That's why I like this platform because we help each other by sharing knowledge and idea about crypto and other stuffs related to this. I believe before engaging into the crypto world properly enquiry need to be made on how it's works to earn and invest before participating in it
I look at things a little differently than most when it comes to scams. Before Crytpo existed, scams existed. We never referred to them as dollar scams or euro scams. Many scams are using Crypto as the payment gateway into the scam. If they used dollar, would we consider the dollar differently? The billions and trillions that have been scammed in history by utilizing the dollar never had a negative impact on the dollar. Why is it different now... food for thought.
Well, while it is true that it has deterred a lot of people from entering the space, I think it is safe to say it has also made people more financially responsible and vigilant which is cool. Everyone should be vigilant and financially responsible, and most importantly, invest only what they’re willing to loose, it still boils down to financial responsibility
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