Building Trust In the Cryptocurrency Market: Solution To the High-Risk Problem For Newcomers
The estimated number of global crypto users has already passed the 200 million mark, a figure that demonstrates the impact of cryptocurrencies today. However, some studies have recently shown the downside of entering the world of cryptocurrencies. Literacy, high volatility, and fraud top the list, but the opportunities far outweigh the downsides. For the industry, the question remains: how to build trust in the cryptocurrency market?
Today, we can find two major drawbacks in crypto: education and security for beginners, which at the same time are related. When starting to get into crypto, not everyone fully knows about it, they just have this idea of getting returns fast in a highly volatile financial product. There are courses that allow users to understand and learn about crypto but these will take time. The normal user wants to see quick results and forget to educate well. This makes them resort to the well-known "easy money in short time" courses, which are clearly a scam and waste of time, affecting beginners' trust on crypto.
Most crypto assets can be purchased or traded within digital exchanges. The biggest one based on 24h volume is the Chinese based Binance, followed by OKEx and LocalTrade (Statista, 2021). Most of these exchanges offer robust security and are compliant with regulatory frameworks. Still, and as the money itself is stored in millions of computers, hackers can find their way in and steal users' crypto. That's where the concern about lack of security in crypto comes to play.
Likewise, lack of patience and sense of wanting to see results soon makes them look for the right crypto copy trading platforms and it is common that they get lost because there are many of them, each one with pros and cons. Beginners can have a bad crypto experience if education and security are not well developed.
The industry is trying to change that perception, with many exchanges and crypto ecosystems providing educational sessions for new users, more accurate information to beginners as well as making security their highest priority.
One that is growing in importance, from that perspective, is the recently founded Tokkea, a set of Fintech services united into a single ecosystem with an internal token. Each of the services has its own unit economy, which makes it possible to diversify risks and obtain sustainable returns for community members. Tokkea follows a basic rule in investment: Diversification is key.
Building Trust: The Tokkea´s Exchange
Currently, there are more than 11,000 different cryptocurrencies in the world and the number keeps growing every year. Nevertheless, the market compared to forex is relatively small. In fact, the total crypto market cap is less than $2 trillion, and more than 45 per cent of this market cap is taken by Bitcoin. Still, the global cryptocurrency market is expected to hit $4.94 billion by 2030; more than triple its estimated size of $1.49 billion in 2020.
In terms of exchange, even though there are more than 300 exchanges nowadays, to keep up with the rise of crypto, we will need more exchanges, more options that can diversify the market but above all that they can provide security and transparency.
Tokkea exchanges understood that problematic within the crypto market, and since it was born, has laid the foundational principles to support newcomers and experts trade securely in their exchange.
Nonetheless, their focus goes in three directions: a flawless user interface, a 24/7 live chat support and unique community support, customer focus, diversification and security.
As the company recently said: "Tokkea Ecosystem is designed to make the use of crypto products easier and more intuitive for beginners to pros. Tokkea Ecosystem also positions itself as a system that will cover all the basic needs for crypto fintech. Our main advantages are: easy trading, security, high transaction speed, stable, open and transparent ecosystem."
Building Trust: Security
As a fintech ecosystem, Tokkea has designed two different products: a crypto exchange and a copy trading platform. This is aligned to their strategy to keep users' hard-earned crypto and their privacy safe when using any Tokkea product.
And Tokkea has developed both products with security in mind. One of the major concerns for users is that 60% of cryptocurrency owners store their assets on an exchange. That is why Tokkea exchange will store 90% of the exchange funds in a cold wallet with multi-signatures.
They have also implemented OWASP security, which refers to the process of ensuring the technical security of the exchange itself. Likewise, Tokkea has compliant with KYC+AML, and a built-in anti-fraud system with an automatic system that monitors suspicious user actions and finds and blocks those who are trying to hack the account and withdraw users' capital. The exchange has also confirmed a Bug Bounty program as a way to keep the community involved and be rewarded if they find a vulnerability.
Importantly, Tokkea has been built with diversification at its core, implementing ETKA microeconomics, which consists of various platforms. So, if problems arise on one of them, they can reduce the risk of a sharp drop in the price of the token.
Building Trust: Education And Community Support
A new exchange has to have the focus on supporting the community, all within a global educational strategy. That's why Tokkea has set up different support channels for its community. These channels, like a live chat working 24/7, open channels on social media. This means that they will provide professional support in order to advise community members in case of questions and difficulties.
Building Trust: Enter the copy trading platform
Putting together security and community support, Tokkea has also designed a brand-new product: a copy trading platform.
"We are confident that users will find it easier to start and become active members of Tokkea through our copy trading platform. We want them to have the ability to compose portfolios from different strategies, according to different levels of risk for different types of trading: spot, margin, futures. If they want to go with a small profitability, they can do it. If they want to take risks and go with leverage, there will also be such strategies. And we have deployed a whole community support strategy to go with them along the way," the company said.
This copy trading platform is an automatic copy trading service that will guide users in the world of investing and trading in the cryptocurrency market. Their copy trading platform focuses on both users and successful traders and seeks to generate mutual benefit for them.
"We wanted to create the perfect place for experienced traders to try new strategies and for beginners to learn from those strategies and test new ones. That's why we created the copy trading platform.
"In that platform, the money is kept in the user's accounts on the exchanges integrated with Tokkea but not on the platform itself. Our own security systems will control trader's work and thanks to our automatic anti-fraud system, they cannot change their shoes on the go, change the strategy and take the user to the wrong place. Furthermore, the openness of the trader's strategies is an opportunity for the user to see where he is investing money. This is what distinguishes a professional trader from a scam," reassured Tokkea.
Crypto Safety and Education
In 2020 alone, cryptocurrency became the most common payment method used in investment scams and fraud. Since October 2020, Americans have lost more than $ 80 million to crypto fraud and so far in 2021, 32 incidents of hacks and fraud for a total value of $2.99 billion have taken place, adding to the figure that in the last 10 years, $ 19.2 billion has been stolen through breaches and fraud (Markets Insider, 2021).
Users need to understand that there are many different types of crypto assets, from utility tokens, which uses a distributed ledger or blockchain platform to provide access rights to a specific product or service -or to be used to purchase specific products or services; security tokens, more commonly sold sold or auctioned in an Initial Coin Offering (ICO) or an Initial Token Offering (ITO) that allows businesses to raise money to fund an idea or business model; to Non-fungible tokens (NFTs), the latest hot topic in the market, which are tokens that exist on a distributed ledger or blockchain, which record ownership of a unique tangible or intangible object. Knowing every single one of them is just the beginning to better understand the market and make better decisions.
At the same time, it is hard to miss the potentiality of the market. Forecasts show that by 2026, the digital currency's global market size will be around $1087 million, an annual growth of almost 4 per cent for Bitcoin, Ripple, Etherium, Dash coin, Litecoin, etc . As of 2021, more than 100 million people are investing in crypto, with a growing number of baby boomers and Gen Xers becoming interested in bitcoin and other tokens.
It is clear that Cryptocurrency is promising, but caution is a term that must come with it. In order to expand security in the crypto world for both beginners and experienced traders and expand the literacy within the crypto market, Tokkea was born.
"At Tokkea we are working to change the cryptocurrency landscape and this October 14 and 15 we will be part of the Biggest Blockchain event in the GCC region, the WOW World of Web3 SUMMIT in Dubai. We are general sponsors and we will present our first 2 products to the ecosystem: Our copy trading and exchange platform," the company concluded.
Note: Investment in cryptocurrency is subject to risk and readers should do their own due diligence. Entrepreneur Media does not endorse any such investment.