What Investors Should Know about Cryptocurrencies and Blockchain
Important risks associated with crytocurrencies and blockchain technology as well as with initial coin offerings (ICOs):
- blockchain technology is a new and relatively untested technology and may never be implemented to a scale that provides identifiable benefits;
- cryptocurrencies and blockchain systems and ICOs could be vulnerable to fraud and cyber security risk;
- investing in cryptocurrencies is highly speculative and an investor can lose the entire amount of their investment;
- if a cryptocurrency or ICOs is deemed to be a security it may be deemed to violate federal securities laws;
- there may be a limited or no secondary market for cryptocurrencies and ICOs; and
- there are risks posed by a lack of regulation in this space.
Glossary of Terms
According to PwC, blockchain is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without the need for a central certifying authority. Potential applications include fund transfers, settling trades, voting, and many other uses.
Artificial intelligence (also known as machine intelligence) is intelligence exhibited by machines. It is often defined as when a machine uses cutting-edge techniques to competently perform or mimic "cognitive" functions that we intuitively associate with human minds, such as "learning" and "problem solving.”
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