Crypto Risks 2022: Who Has The Key?

5 Minute Read | 
April 26, 2022

“I feel like it’s like all this stuff is a moving target at this point. And it’s you just got to be aware that that these things can change at any point.”


Adam Stalnaker 0:05
Adam and Joe back again for part two of the risks of crypto. Let’s dive right in Joe.

Joe Kovach 0:12
Yeah, but you know, we the first four in the in the first video number five, destruction of what they called a private key or loss of your private keys and in real real simple terms, if you store your your crypto in a wallet, there’s a public key and a private key. And obviously, you have the private key. If you lose that private key, you lost your crypto, you’re not getting it back.

Adam Stalnaker 0:37
Stories about this guy who’s got like, three different three attempts left, you know, million dollars in crypto sitting in this wallet and

Joe Kovach 0:46
stressful, stressful yet so. So I think the point you want to take away from this is when you when you store your your crypto wallet, get the private key and stored in a safe place and possibly multiple places. Yeah, so you know where that thing is at all times?

Adam Stalnaker 1:01
20% of all, we’re using Bitcoin as an example. But 20% of all Bitcoin that’s lost is due to this, which is Yeah, crazy.

Joe Kovach 1:10
Yeah, no, that is for sure. So just be careful there. And

Adam Stalnaker 1:14
number six years, unregulated trading platforms and exchanges. You know, I think this is the theme at this point, right? It’s, it’s kind of, would you call it the wild wild west? Where, right, you’ve got these, you’re at the mercy of the the exchanges and the platforms. And, you know, with no backing of governments or, you know, it becomes, you know, a risk that these things could just go away. And then

Joe Kovach 1:41
yes, they would stay with a reputable, you know, exchange. That’s that’s the lesson to be learned there as well. We’ve mentioned that point several times.

Adam Stalnaker 1:48
Yeah. And there’s so many different Kryptos. It feels like there’s a new one every single day. And it’s something like 10,000. Now, I would stick to stick to the ones that are becoming more more of the staples. You hear all all the time one is created, and then somebody loses a million dollars in it, because they they wanted that speculation they wanted that. Well, it’s it’s unregulated. So they just Yeah, said they took it and who were they? Were they supposed to go back to to get that money back?

Joe Kovach 2:17
There’s no one. Exactly. Yeah, no, it’s crazy. So you know, and we’ll go to the next one, which is regional regulation. And really, that just means this is a global issue. Okay, this is not just the United States trying to regulate crypto at some point. globally. Everyone’s trying to figure this thing out. So you have some countries that have actually adopted it as their main currency. You have other countries that won’t go near it. Regulations are wide. So it’s just again, it’s kind of what we’ve been talking about infancy stages here, long way to go. Government regulations are going to come in globally. And you just don’t know where these are.

Adam Stalnaker 2:54
It’s just it’s just so many unknowns, right? It totally Yeah, absolutely. It’s not going away. But it’s trying to figure out and governments are trying to figure out all the time of how they’re going to regulate and how they’re going to tax it, which we’re going to talk to talk about in a minute. And then, you know, in a number eight then is you know, currency conversion risks, you know, you need your money, we talked about the volatility of it. You know, sometimes it takes a little bit of time to get this out. And from one day to the next, you can drop a significant amount of money. So yeah, a ton of risk when it comes to when you want to convert it into to real cash to use for

Joe Kovach 3:31
if you’re gonna try and buy a car with with a Bitcoin in it strings together a series of those five to 10% down days that that hurts, right? Absolutely. Absolutely. So and then we’ll get to the last one, which is taxation. And just remember, crypto is taxed just like a stock, you buy it, you sell it, capital gains, and so forth. But there’s a whole handful of transactions that are non taxable at this point, that at any point in time as these regulations advanced could become taxable, so that that landscape is very much

Adam Stalnaker 4:01
one I feel like it’s like all this stuff is a moving target at this point. And it’s you just got to be aware that that these things can change at any point,

Joe Kovach 4:09
no question, infancy stages, like we said, so just be careful mind your risks. You know, we do consider, like most people, it’s an asset class for sure. But it’s just it’s it’s young, and it’s going to be changing.

Adam Stalnaker 4:21
So if you guys have any questions about some of the things that we covered today, or crypto or how crypto can be used in your portfolio, you know, reach out and we’ll have a conversation