Is Vechain (VET) Safe?

Last Updated February 2nd 2022

6 Min Read

Well, Vechain can be said to be a rather solid investment given that it has an overall positive ROI and because the fundamental and technical indicators point to a bullish future for the altcoin. Other factors that make Vechain a safe investment include the fact that it is built on highly decentralized technology.

However, as is the case with all other crypto investments, Vechain is not immune to risks. It finds itself operating in a financial ecosystem that has been infiltrated by hackers, cons, and other cybercriminals. These are always looking for ways to steal or trick Vechain and other crypto investors out of their digital asset holdings.

In the last 5 years, for instance, the Federal Trade Commission (FTC) reports that crypto crimes have increased by an average of 312% per year. This says that the number of attacks on investor wallets, crypto exchanges, and other crypto trading and storage platforms has increased tremendously.

You probably have noticed this trend and must be asking yourself if Vechain truly is a safe investment. We will answer this question in this post by telling you of the crypto investments risks that are unique to Vechain and how you can avoid them.

First, though, we look at what you need to consider before you buy your first Vechain token.

What to Consider Before Buying Vechain (VET)

For starters, you need to understand that Vechain has the first-mover advantage in the supply chain industry. It, therefore, is expected to continue attracting more partners and real use cases for its blockchain technology. This will, in effect, push up VET token prices whose value gain, increased liquidity, and accessibility, in turn, attracts cybercriminals.

This says that while Vechain’s value has an unmatched potential for future value gain, your investment in the altcoin isn’t entirely safe.

You also need to understand that Vechain’s price action is influenced largely by factors outside the crypto network’s control. For instance, you will notice that while Vechain scored numerous partnerships between 2018 and 2020, its prices only started rallying in early 2021 and were largely driven by the wild crypto market rally that rocked the industry.

You, therefore, need to consider more than just the Vechain blockchain’s potential when making the investment. You also need to monitor the performance of the rest of the cryptocurrencies - Bitcoin in particular - as they ultimately shape the VET token’s price action.

Most importantly, we recommend that you only invest what you can afford and are willing to lose.

What Are The Risks Associated With Vechain (VET)

There are two primary risks affecting Vechain investments today - untamed volatility and the increased cybercrime.

The crypto market and cryptocurrencies thrive on price speculation, and Vechain is no exception. Investors are constantly making frequent and sentiment-influenced buy/sell decisions, and this translates to a sudden cash inflow, especially when there is positive news about VET or the crypto market and an equally sudden outgo after bad news. This makes Vechain prices quite volatile, which poses a major risk to any investment.

In its report, the FTC adds that we aren’t just witnessing an increased number of cyber-attacks, losses from these hacks have also increased tremendously. In the period between the last quarter of 2020 and the first quarter of 2021, their financial crime report says, investors in the US lost more than $80 Million, with the medium amount being $1900 per investor. As Vechain’s value increases, we are bound to see more targeted hacks aimed at VET wallets and VET focused trading and digital asset storage platforms.

Other Types Of Scams To Look Out For:

Possible pump and dump schemes

Traditionally, pump and dump schemes involved moneyed investors inciting a fake VET token price run by buying a lot of the asset at a low price and dumping them all later at a higher price, leaving everyone else holding on to a worthless or hyper-inflated investment product. Today, we have influencers who position themselves as legit analysis and crypto experts.

Most start by offering correct analysis of a coin’s price projections, but as soon as the market trusts them, they misuse this trust and influence. They intentionally present their audience with wrong analysis or false signals with the aim of benefiting themselves or a few individuals from the bull or crypto price decline resulting from this misinformation.

Fake DeFi and rug pull scams

Vechain is positioning itself as the superior blockchain on which more innovative DeFi apps and enterprise NFTs can find a home. This exposes investors to potential fake DeFi apps or other investment protocol scams. In a classic rug pull scam, a developer comes with a DeFi app or investment program that promises attractive returns on investments.

Most of these are have a closed source design, which allows sketchy developers to leave a backdoor to the code. After investors have pooled-in tangible capital, these developers use the backdoor to siphon these funds and blame it on hackers. Others simply take the app or investment platform down (pull the rug) and vanish with investor deposits.

Fake websites and social media scams

In the case of fake websites, criminals create fake websites that mirror the front end of popular Vechain trading platforms or wallets. They then use social media to promote fake discounts to innocent investors, effectively attaching links to fake websites.

In targeted hacks, these criminals will email the link to you with a scary and urgent message, mostly about compromised user data or ongoing hacks within the exchange or wallet and the need to change your password.

But as soon as you enter the exchange account or wallet login details on these fake websites, the hackers use your details to access your account/wallet on the actual platform and steal your funds.

How To Keep Vechain (VET) Safe?

If you are to keep your Vechain investment safe in this fast-paced technology era, you need to always strive to be one or two steps ahead of the cybercriminals. And you can achieve this in a number of ways. For starters, you need to take advantage of the multi-factor security system provided by your crypto exchange or wallet.

Use unique passwords, enable two-factor authentication, enable multi-signature functionality, and, where possible, set withdrawal or spending limits. Alternatively, and especially if you plan on holding a significant volume of VET tokens, invest in the more secure hardware wallet.

Keeping safe also involves avoiding greed and vetting crypto investment programs thoroughly before investing in one. It also requires you to keep tabs on crypto industry news and events that teach you of reported hacks, current or emerging crypto scams, and how to avoid them.

Unfortunately, though, there is little you can do to escape the normal Vechain token price or crypto market volatility.

Check Out: Why Is VeChain (VET) So Cheap Right Now?

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

Vechain (VET) Security Vs. Privacy

When it comes to guaranteeing the safety of your Vechain investment, the terms crypto security and privacy can be confusing. You will even come across discussion forums where the two are used interchangeably. But as Kiana Danial - the author of ‘Cryptocurrency for Dummies’ would tell you, Vechain “security and privacy are two (very) separate topics.”

Throughout this post, we have been discussing Vechain security, which involves understanding the risks to your VET tokens and different ways in which the assets can be stolen or lost and taking practical steps to avoid this loss.

If we were discussing Vechain privacy, we would be looking at the crypto trading and storage platforms that have access to your personal information. We would be vetting how they handle and store user data, we would also be seeking to understand how this data is accessed or shared. We would also have told you that the Vechain blockchain is pseudonymous. This says that while it doesn’t attach your SSN or any other identification data to each VET transaction, it isn’t impossible to identify the party behind a particular VET transaction.

Conclusion: Is Vechain (VET) a Safe Investment?

Well, Vechain has had a hugely successful year so far, which saw its value gain appreciate by 99.29% in a year, experts are also confident that its value will continue soaring, and these make it a relatively safe investment. When investing in VeChain, however, you need to understand that there numerous external factors that pose significant risks to such an investment. These include increased incidence of hacks, price volatility, and online scams. Before you buy your first Vechain altcoin, therefore, you need to first familiarize yourself with all these risks and come up with a plan on how to avoid them.