We can say that 2022 is a year full of twists and turns in the cryptosphere. If some made money, many received RECT. They lost due to bad investments, scams, CEX (centralized exchanges) failures or even all of the above. The FTX disaster that follows many others is perhaps an opportunity to remember the basics of not “getting REKT”. »
We can already start with a small reminder about the origin of the word REKT.
Origin and Meaning of REKT
REKT (or rekt) is derived from the English word “wrecked”. It is a slang term for something or someone that has been destroyed, looted, destroyed. The origin may be the use of this word by a user, Balrogboogie, on a World of Warcraft forum in 2012.
Originally used in games, REKT is well suited to the ruthless world of trading: every trader will experience REKT at least once in their career. So to become STRAIGHT is to lose everything brutally, even very brutally. Bad trade (with leverage effects catastrophic), way out of cheating, unexpected failure of an exchange, many individuals have lost colossal sums this year in the crypto market. The summer was fraught with disaster and the nightmare culminated in the bankruptcy of FTX, which was only a short time ago. the second crypto exchange after Binance.
You can get REKT without trading!
The promise of easy profits in bull market phases attracts many retail investors. Starting out more or less well online, they jump into the adventure with hope (and sometimes greed) and are easy prey for thieves. Perhaps out of comfort, these new investors leave their funds in the stock market or trust more or less honest people.
And therein lies the real problem: bitcoin (BTC) was born during the subprime crisis, which culminated in bank failure. Lehman Brothers and the discovery of Bernard Madoff’s giant Ponzi scheme. Bitcoin was born to no longer need a banking intermediary or a so-called “trusted” third party. Bitcoin was born so that citizens could conduct transactions between themselves, transactions Peer to peer.
“Not your keys, not your bitcoins”
Sometimes we learn the hard way. Once bitcoins and cryptos are on a centralized exchange, they do not belong to their non-existent owner private keys of their cryptocurrencies. This is so that if the exchange is shut down or hacked, there is nothing more that users can do to recover their funds. In any case, it will take time and the result will remain uncertain. Therefore it is essential to have a hardware portfolio like Bitbox, Ledger or Trezor (there are many others elsewhere). When you are not an informed trader, it makes more sense to invest regularly (DCA) and own his private keys. In any case, do not put all your funds in a single exchange.
If troubled banks receive state support (with citizens’ taxes) in most cases (Big Tea very bankrupt, which means that if one big bank failed, it would destabilize the whole system and for that reason it needs to be bailed out of its coffers), it is not the same as cryptocurrency exchanges. Therefore, there is almost no guarantee of getting your funds back in the event of bankruptcy. And no exchange is immune as the terrible history of FTX clearly shows. This will give further food for thought to critics of bitcoin and cryptocurrencies 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 funds, that’s why bitcoin was born.
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Subprimes, financial crises, galloping inflation, tax havens… Bitcoin was created for more transparency and maybe finally to change the situation. I try to understand this new environment and I try to explain it myself. The road is definitely long, but it’s worth it.