UK Crypto Investors’ Lack of Knowledge Is “Very Concerning” as Just 5% Make “Financial Gains”

  • A recent study found that most cryptocurrency investors in the UK put their money on the line without understanding cryptocurrencies.
  • Potentially as a result, only 5% of the UK's crypto investor managed to turn a profit.

A study conducted by IW Capital, a Mayfair-based SME investment house, recently found that most cryptocurrency investors in the United Kingdom (UK) don’t thoroughly understand what they’re investing in, leading to losses – something the firm’s CEO said is “very concerning.”

According to the research, shared with Express, 38% of the UK’s crypto investors don’t “understand” cryptocurrency, and a third believe a supposed bitcoin bubble is going to burst in the near future.

Per the study, 7% of the 2,007 nationally representative sample revealed they believe cryptocurrencies are a more valuable investment than traditional financial products like stocks. Notably, only 5% of those who invested in cryptos made financial gains, a figure likely skewed by investors who “don’t understand” cryptocurrencies.

IW Capital’s report reads:

The data reveals that, fundamentally, Brits do not have enough information or knowledge on the topic of cryptocurrency. In fact, many have no knowledge about the subject whatsoever.

IW Capital

Despite a seemingly widespread lack of knowledge regarding cryptocurrencies, the survey further found that most of those who invested without understanding cryptocurrencies or the technology behind them did so without consulting a financial advisor.

Notably, Express’ report reads that only 5% of those who invested took advice from a financial advisor. Adding to this that most cryptocurrency investors joined the ecosystem in late 2017, when most cryptocurrencies were at their all-time high, the small percentage of investors who turned a profit shouldn’t be surprising.

Nevertheless, IW Capital’s chief financial officer Luke Davis noted the results are “very concerning.” He said:

It is shocking, but not surprising, to see so much confusion around the topic of cryptocurrency. I do not believe this is a reflection of UK investors’ risk profile, as a positive appetite for alternative finance remains, but to see that investments have been made without proper financial advice and a lack of facts and education is very concerning.

Luke Davis

IW Capital’s study comes at a time in which a Wells Fargo poll revealed only 1% of US investors plan on buying bitcoin, the flagship cryptocurrency. Since its near $20,000 all-time high, BTC dropped to little under $6,000 before bouncing back to its current price of $8,190.

The market’s sentiment is seemingly bullish, as cryptocurrency-focused investment firm Pantera Capital recently noted it sees bitcoin hit $67,500 by the end of 2019. Via a blog post, the firm revealed that Pantera Bitcoin Fund generated a return of over 10,000% over the past five years.

Error in Time-Locked Bitcoin Contracts Allows for Miner 'Fee-Sniping'

Michael LaVere
  • Crypto researcher 0xb10c discovered an error in bitcoin "time-locked" transactions that could be used as an attack vector.
  • Miners can take advantage of the program to carry out "fee-sniping" and steal funds from one another. 

Users have discovered an error in bitcoin “timelocked” contracts that could potentially allow miners to steal BTC from one another. 

Anonymous crypto engineer 0xb10c reported discovering more than one million “time-locked” transactions made between September 2019 and March 2020. In a post, 0xb10c detailed how these special bitcoin transactions were not being accurately enforced by the network. 

As opposed to normal transactions, time-locked transactions prevent recipient bitcoin from being accessed after sending. Users must wait for a specific number of blocks to be added to the network in ten-minute intervals before gaining control of their bitcoin. 

0xb10c claimed the errant time-locked transactions provided an attack vector for miners to steal transaction fees  from one another via “fee-sniping.” According to the engineer, the backlog of time-locked transactions were being purposefully designed for a “potentially disruptive mining strategy” involving the theft of miner fees. 

In an interview with CoinDesk, 0xb10c said time-locked transactions represented a “low-priority” problem at present that could eventually balloon to involve the wider network. He explained that fee-sniping would become more lucrative in a few years as the majority of miner income shifts towards transaction fees. 

He continued, 

A fix for this has been released in early 2020. However, it will take a while before all instances of the currently deployed software are upgraded.

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