Well, we will need to consider several factors in order to understand how Celo stacks up in terms of safety.
Celo was founded in 2017 with the goal of creating a payment infrastructure for cryptocurrencies that can be used by anyone globally. It functions like any other cryptocurrency but also allows for the development of decentralized applications on its blockchain.
Celo also supports a stablecoin named Celo Dollars (cUSD), which is a fiat currency pegged to the US dollar and used for transactions within the platform. The goal of issuing a stablecoin is to reduce volatility and increase usability by acting as a medium of exchange, storage of value, and unit of account.
In this regard, Celo has two native coins: CELO, a governance token for voting on network changes, and cUSD, which is the stablecoin mentioned above.
In terms of safety, we can't really give a straight answer. Celo can be safe and not safe at the same time. In order to avoid risks when investing in this coin, there are several things you should keep in mind.
Safety Factors To Consider Before Buying Celo (CELO) Tokens
Before putting your money in CELO, there are several safety factors you should be aware of.
These are:
1. CELO is Volatile
First of all, CELO is volatile. Like most cryptocurrencies out there, it isn't stable and can be influenced by several factors such as news around the platform, regulatory requirements in your country, and changes to the blockchain.
This means that your investment in this cryptocurrency is pretty much at risk because of its volatility. There are cases where cryptocurrencies have lost almost 90% of their value within 24 hours. So it is important to be aware of this risk if you plan on buying CELO tokens.
2. CELO is Unregulated
The fact that CELO is unregulated is both bad and good. It is good because it means you have the freedom to do whatever you want with your investment. But, it is bad because your money might be at risk if the platform gets hacked or something goes wrong.
In this case, there is nothing much you can do because there is no authority that can come to your rescue.
3. CELO is Relatively New
The fact that CELO is a new platform can also be an issue. The coin began trading in May 2020, which means that it has been in the market for less than two years. Because of this, there isn't much we know about CELO.
This means that a lot could go wrong if the team fails to deliver. So it might be a good idea to invest in this cryptocurrency after thoroughly investigating the team behind it, their plan of action, and what they hope to achieve. This way, you can avoid making mistakes that could blow up your investment.
4. CELO is Prone to Hacking
Like any other cryptocurrency, CELO is not safe from hackers. There are cases where cryptocurrency exchanges have lost millions of dollars because of hacking attacks.
Because CELO is an open-source platform, it would be very easy for someone to hack the system and steal key pieces of information like usernames and passwords.
The best way to avoid being hacked is by storing your tokens in a secure hardware wallet. While this is less convenient than a hot wallet, it is safer since it can't be easily accessed by hackers.
Read Also: Celo Price Predictions
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Other Risks Associated With Celo (CELO) Investing
Apart from the four above, there are also other risks that you might be exposed to when you invest in CELO.
These include crypto scams such as:
- Imposter websites
- Fake wallets
- Social Engineering Scams
- Phishing Scams
Imposter websites
These are fake websites that impersonate the official website to steal your private keys, login details and passwords. For example, if you search for Celo on Google, you might be directed to a fake site with an almost similar URL (such as celo.com instead of the official celo.org) but set up by hackers so they can steal your information and access your wallet.
To avoid this, you should always double-check the URL before typing in your login details.
Also, look out for misspellings because hackers often misspell words to make these fake sites appear real.
Fake wallets
Fake wallets are fake versions of real wallet apps that are set up by hackers. Sometimes these wallets appear similar to the original ones, but they have bugs that cause them to keep all your coins when you send them. Once you download this kind of app, it will scan your system for information and other tokens.
To avoid this, you should always go to the official wallet apps of CELO.
Furthermore, make sure that your computer is free of any viruses before downloading these apps because some hackers are even known to use trojans to steal your data.
Social Engineering Scams
A social engineering scam involves a hacker sending you an email or private message pretending to be a representative from Celo Network. They usually use this as an opportunity to ask for your private keys and other important information, which they can then use to access your wallet and steal your coins or tokens.
To avoid social engineering scams, you should always go directly to the official website of CELO and verify whether any messages have been sent by their company or not.
Finally, never give out your private keys to anyone because it is equivalent to giving them full access to your wallet and all the funds stored in there.
Phishing Scams
Phishing scams are used by hackers who send private messages pretending to be real members of Celo but are actually carrying out a scam.
Phishing scams usually target online wallets where you store your coins. To avoid these scams, always check to see if the URL of the site is correct before logging in or entering any information into it.
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How To Keep Your Celo (CELO) Tokens Safe
Despite the risks associated with investing in CELO, you can ensure the safety of your CELO tokens by following these best practices:
Use an official hardware wallet
As mentioned above, the best way to prevent your tokens from being stolen is by storing them in an offline hardware wallet. By removing your tokens from the internet, you eliminate any chance of them being hacked or stolen.
The best hardware wallet to use with CELO is Ledger Nano X.
Trade CELO on credible exchanges only
Another way to keep your tokens safe is by trading them on reputed exchanges.
By choosing reputable exchanges, you can rest assured that you are not trading with scammers or phishing sites because they usually get reported quite quickly after their discovery.
Don't share your private keys with strangers
The private keys are the key to your funds, which means that if you lose them, the person who has them can access all your funds.
For this reason, you should take extreme caution when sharing your private keys with anyone.
Bottom Line: Is Celo (CELO) Token A Safe Investment?
Unfortunately, cryptocurrencies are not immune to security issues. And CELO is no exception.
You can ensure the safety of your tokens by buying a hardware wallet like the Ledger Nano X, trading them on reputable exchanges only and taking extreme precautions when it comes to sharing your private keys with strangers.
However, you should bear in mind that even though these practices will keep you safe, there is no guarantee that hackers won't find a way to access your tokens.
Thus, if you are looking for guaranteed safety, it is better not to invest in CELO at all. But if you are really willing to take the risk, look out for safety loopholes that drown your investment.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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