THE value of cryptocurrency EOS has gone up by almost 50% in the past 24 hours to hit £9.41 ($13.31).
But what is EOS and why is the price going up? We explain all you need to know.
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Before we get to that, a word of warning: buying cryptocurrencies, like any investment, is a risky business and making money is never guaranteed.
You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.
Cryptocurrencies are highly volatile, so the value of your investments can go down as well as up in the blink of an eye.
As always, never invest in something you don't understand.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
What is EOS?
EOS is the crypto token of the EOSIO platform, the latter which is designed to allow developers to build decentralized apps.
These are digital applications or programs that exist and run on a blockchain or peer to per network of computers instead of a single one.
The aim is to make it as easy as possible for programmers to embrace blockchain technology.
The technology is a kind of database used to record transactions and is at the heart of cryptocurrencies such as Bitcoin.
EOS launched in June 2018, having been developed by the company Block.one.
Its white paper was authored by Daniel Larimer and Brendan Blumer.
Simon Peters, cryptoasset analyst at eToro, told The Sun EOS was "built to rival Ethereum".
He added: "However, it doesn’t currently have the scale or prestige of Ethereum, and has gone under the radar compared to bigger cryptoassets which have had far more attention due to the scale of their price gains, and the wider use case for them."
Why is the EOS price going up?
The value of EOS is currently sitting at £9.41 ($13.31), up by 46% in the past 24 hours, according to CoinMarketCap.
In comparison, it was worth a lower £6.47 ($9.15) just yesterday.
The value of EOS has gone up after Block.one yesterday announced a new subsidiary, Bullish Global, with more than £7.1billion ($10billion) in funding.
Bullish Global will be an EOS-based cryptocurrency exchange and is set to launch sometime this year.
Cryptocurrencies have generally also enjoyed recent surges in value after the first major crypto exchange Coinbase went public last month.
Mr Peters added: "[EOS] was in the public eye earlier this year when the chief technology officer of Block.one stepped down, as he was arguably the driving force behind the asset,.
"But the near-doubling of its price in the last week likely lies in investors looking for value and rotating out of Bitcoin."
How risky is EOS?
Investing in any cryptocurrency is essentially gambling and there are no guarantees that you will see what you pay in go up in value.
It's a speculative investment, with limited track records and no underlying value.
There is also no guarantee that you can convert crypto assests back into cash, as it may depend on the demand and supply in the existing market.
Although EOS was created in 2018, keep in mind that investing in newer cryptos, rather than Bitcoin, is even riskier and makes you more open to scams.
How to spot crypto scams
CRYPTO scams are popping up all over the internet. We explain how to spot them.
- Promises of a high or guaranteed return – Does the offer look realistic? Scammers often attract money by making fake promises.
- Heavy marketing and promotional offers – If they are using marketing tricks to con customers you should beware.
- Unamed or non-existent team members – Just like any business you should be easily able to find out who is running it.
- Check the whitepaper – Every crypto firm should have a white paper. This should explain how it plans to grow and make money. If this doesn't make sense, then it could be because the founders are trying to confuse you.
- Do your research – Check reviews online and Reddit threads to see what other people think.
Myron Jobson, personal finance campaigner at interactive investor, told The Sun: "There is no denying that cryptocurrency is gaining more mainstream attention thanks to the stratospheric rise of Bitcoin.
"The worry is that FOMO (fear of missing out) investors, won’t look before they leap and, encouraged by glossy marketing hooked on the meteoric rise of Bitcoin, invest in crypto assets which is a highly complex, high risk and relatively new area of investment.
“The performance of Bitcoin is hard to ignore, but we have seen all this before in 2017, and it’s come crashing down to earth.
"While it’s always tempting to follow the ‘this time it will be different’, the fact remains that the asset is notoriously volatile – and for many investors, the price swings have been simply too wild to stomach."
Brits are being warned they risk losing all of their money if they invest in bitcoin and other cryptocurrencies.
It comes after a ban on some crypto-related investment products.
From Dogecoin and Litecoin to Bitcoin – here are the different cryptocurrencies explained.
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