Is The Graph (GRT) Safe?

Last Updated February 3rd 2022
7 Min Read

Well, like virtually all other digital and conventional investments, The Graph is not risk-free. Look at it this way, just as you are drawn to cryptocurrencies like The Graph because of the promise of growing your portfolio through speculative investments, cybercriminals are drawn to it because of the veil the pseudonymous nature of most crypto networks accords their crimes.

This explains why, today, we have a lot of tech experts turning to hack as a career, as evidenced by the rising cryptocurrency crimes in the world - some of which target GRT investors/traders.

Since 2016, the Federal Trade Commission (FTC) reports that crypto-related crimes have been rising by about 312% per annum, and so are the losses suffered by crypto investors. Between October 2020 and March 2021, for instance, the regulatory body reported that crypto investors in the US lost more than $80 Million to crypto theft, hacks, and fraud - with the median loss standing at $1900.

Though it is relatively new and most of these reports indicate that Bitcoin is the primary target for most crypto criminals, any crypto expert will still tell you that The Graph to be a risky investment. Why? You might ask.

Well, primarily because it’s a rather volatile investment product that is also exposed to the risks of theft, hacking, and fraud. It is also a highly volatile investment that operates in an equally volatile market. It, like the rest of the crypto assets, is exposed to all the threats and risks facing the larger crypto market, most of which you have control over and some that are beyond your control.

In this post, we will be telling you all about these risks and what you can do to keep your GRT investments secure. We will tell you of the different risks facing The Graph investors and how you can avoid them.

First, though, we need to go through a few things that you need to know before buying The Graph tokens.

What To Consider Before Buying The Graph (GRT)

For starters, you need to understand that The Graph is a hugely volatile crypto investment.

Its prices fluctuate often, and these fluctuations can be quite drastic. It, therefore, isn’t uncommon for The Graph token prices to rise or fall by double-digit percentages in a relatively short period of time - typically a day or within a few hours.

For instance, between 11th and 12th February 2021, The Graph token prices appreciated by more than 200%. And between the 22nd and 23rd of the same month, the ERC-20 token shed more than 30% of this value.

In almost all these instances, you have zero control over these fluctuations and the impact they have on the altcoin prices because most are market-induced. For instance, GRT is currently trading about 70% below the peak price hit in February 2021. Much of this dip can be attributed to the mid-May price crash in 2021 as well as the introduction of new GRT tokens to the market in June and July the same year - both of which you have absolutely zero control over.

You also need to learn how to eliminate emotions from your trade/investing decisions. Learn to avoid FOMO when making your trades, and even more importantly, learn when to take profits and when to exit a losing position.

Lastly, you need to learn how to allocate your crypto trades. Most crypto experts advise that you consider dedicating converting between 5% and 40% of your investment capital to crypto. Around 5% for the newbie or risk-averse traders and around 40% for the more experienced and risk-tolerant crypto traders.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

What Are The Risks Associated With The Graph (GRT)?

There are two primary risks acting on your GRT investment are the risk of theft of the altcoins to hackers and that of untamed volatility.

The common denominator between volatility and hacking is that they both lead to the loss of your capital, earned profits, or both. However, while the loss to volatility is impermanent and will be recovered when the ERC-20 token prices rally again, the loss of GRT to hackers is permanent, and there are slim to zero chances of ever getting this investment back.

Other Scams to Watch Out For

Crypto pump and dump schemes

In a classical pump and dump scheme, an individual presents themselves as a pro-crypto analyst. They set themselves on a mission of earning investor interest and confidence by providing highly accurate information about a particular coin - GRT in this case - and actionable price forecasts. After they have earned everyone’s trust, they start spreading misinformation with the aim of sparking a temporary rally or price drop. By this time, they or their cronies have already entered a large buy/short position and will liquidate them as soon as the temporary rally or dip starts matures, leaving everyone else holding the bag.

Phishing through fake websites and social media promotions

In addition to sending malicious links to your email and social media account inboxes, crypto scammers also trick you into surrendering your personal information through fake websites and social media promotions. In this case, they create fake websites that mirror the front end of the actual exchange or wallet website. They then trick you into keying in your login credentials into this dummy website that they use to hack your real wallet or exchange accounts.

Crypto Ponzi and pyramid schemes

In crypto pyramid and Ponzi schemes, criminals come with DeFi and crypto dApps and other finance-focused programs that promise higher than average returns on crypto investments. They then trick you into locking your GRT tokens here, only to pull down the investment program and vanish with all investor funds.

Check Out: Is It Worth Investing In The Graph (GRT)?

How To Keep Your The Graph (GRT) Safe

Interestingly, most of these risks to crypto investments are avoidable. For instance, a recent report by Verizon indicated that 80% of all online hacks are a result of weak passwords. They can be avoided by using strong passwords for both exchange and wallet accounts. We also advise you to enable multi-factor authentication for logins into exchange and wallet accounts as well as crypto transfers.

The rest of the crypto scams, including pump and dump, fake websites, and Ponzi schemes, can be avoided fought through due diligence. Put simply, do not buy The Graph or any other cryptocurrency on the word of an ‘expert’; instead, learn to complement their opinions with your own research. Secondly, just as we mentioned the need to tame emotions if you are to escape FOMO, you also need to tame your greed if you are to void falling for crypto Ponzi and other MLM schemes.

Additionally, do not click on any suspicious links and consider bookmarking your crypto exchange and wallet websites. You should consider confirming the reputation of investing programs and their developers as well as that of crypto ‘experts’ and avoid programs and individuals with soiled reputations or absent portfolios.

Lastly, consider following crypto news and cybercrime reports from investigative agencies like CipherTrace or regulatory agencies like the FTC to learn about new and emerging crypto scams and how to avoid falling victim.

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The Graph (GRT) Security Vs. Privacy

As we conclude on the topic of whether The Graph is a safe investment, you need to appreciate the fact that there is a world of difference between GRT token security and privacy.

Crypto security relates to how your financial data, i.e. the private keys for your GRT tokens, are protected from unauthorized access. Throughout this post, we have discussed the safety of The Graph token by pointing out the different risks to the security/safety of your GRT tokens and how they can be avoided or eliminated altogether.

Crypto privacy, on the other hand, refers to the level of anonymity accorded to your crypto transactions and personal information. If we were discussing The Graph privacy in this post, we would have looked at the level of anonymity provided by the Ethereum blockchain where the ERC- token is hosted, the amount of personal data that crypto exchanges and wallets collect, how it is stored, who has access to this data, and how it is shared - if ever. 

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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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