We can say that 2022 is a year full of twists and turns in the cryptosphere. If some made money, many got REKT. They lost due to bad investments, scams, CEX (Central Exchanges) failure or even all of the above. Perhaps the FTX debacle that followed many others is an opportunity to remember the basics so as not to get a REKT. »
We can actually start with a simple reminder about the origin of the word REKT.
The origin and meaning of REKT
REKT (or rekt) is derived from the English word “wrecked”. It is a general term to identify something or someone that has been destroyed, plundered or exterminated. The origin could be the use of this word by user Balrogboogie on a World of Warcraft forum in 2012.
Originally used in games, REKT is a perfect fit for the rough world of trading: every trader will experience REKT at least once in their career. Becoming REKT means losing everything so brutally, even so brutally. Bad trade influence effect disastrous), Get out of the scamAnd the Sudden failure of the exchangeMany individuals have lost huge amounts of money this year in the cryptocurrency market. The summer was fraught with disaster and the nightmare culminated in the bankruptcy of FTX, which was only a short time ago. Second crypto exchange after Binance.
YOU CAN GET REKT WITHOUT TRADING!
The promise of easy wins in bull market phases attracts many retail investors. Starting out fairly well on the Internet, they throw themselves into an adventure full of hope (and sometimes a lot of greed) and are easy prey for them. scammers. Perhaps out of convenience, these new investors leave their money on the stock exchanges or entrust it to more or less honest people.
And herein lies the real problem: Bitcoin (BTC) arose, however, during the subprime mortgage crisis, which culminated in a bank bankruptcy. Lehman Brothers And the discovery of Bernard Madoff’s gigantic Ponzi scheme. Bitcoin was born so that it no longer needed a banking intermediary or any other “trusted” third party. Bitcoin was born so that citizens could conduct transactions among themselves, transactions one to one.
“Not your keys, not your bitcoins”
Sometimes we learn from pain. Once bitcoins and cryptocurrencies are traded on a centralized exchange, they do not belong to their owner who does not own private keys of their cryptocurrency. This means that if the exchange is shut down or hacked, users will not be able to do anything else to get their money back. In any case, it will take time and the outcome will remain uncertain. So it is necessary to have a hardware wallet like this little square, Ledger or Trezor (there are many others elsewhere). When you are not an informed trader, it is reasonable to invest regularly (DCA) and have its own private keys. In any case, do not put all your money into one exchange.
If troubled banks get state support (from citizens’ taxes) most of the time (fail too big, which means if a big bank fails, it destabilizes the whole system and therefore needs to bail out its coffers), not the same with cryptocurrency exchanges. So there is almost no guarantee that you will get your money back in the event of bankruptcy. No exchange is immune as the terrible story of FTX clearly shows. This will give more thought to critics of bitcoin and cryptocurrency and new reasons for lawmakers to tighten controls. However, the problem is not Bitcoin (BTC), the problem comes from trusted third parties: mismanagement, hacking, corruption and greed. It’s time to manage your own money, which is why bitcoin was born.
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Mortgage, financial crises, accelerating inflation, tax havens… Bitcoin is designed for more transparency and perhaps eventually change the situation. I am trying to understand this new environment and try to explain it myself. The road is undoubtedly long, but it’s worth it.