Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
1. You could lose all the money you invest
The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
2. You should not expect to be protected if something goes wrong
The Financial Services Compensation Scheme (FSCS) doesn't protect this type of investment because it's not a 'specified investment' under the UK regulatory regime – in other words, this type of investment isn't recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker.
The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
3. You may not be able to sell your investment when you want to
There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
4. Cryptoasset investments can be complex
Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
You should do your own research before investing. If something sounds too good to be true, it probably is.
5. Don't put all your eggs in one basket
Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
If you are interested in learning more about how to protect yourself, visit the FCA's website here.
For further information about cryptoassets, visit the FCA's website here.
Request (REQ) is a decentralised payment system built on the Ethereum blockchain. It has the long-term objective of replacing incumbent payment platforms by creating a universal ledger to support transactions of all kinds, and using advanced technology to automate and simplify the process.
It aims to be a new layer on the global payment network, allowing for automation of requirements such as tax witholding, interest payments, security issues and almost anything else.
It uses an ERC20 token referred to as REQ but has the capacity to work with every major currency in the world. All transaction information on the network is stored in a shared decentralised ledger.
How does REQ work?
When a user makes a request for payment on the ledger, the recipient will receive it via a financial app or wallet. The recipient then confirms the accuracy of the request and makes approval for payment. The system automatically debits the relevant account and updates the transaction on the network’s database.
Below are the benefits of using REQ.
Make payments online
The world has embraced the simplicity and convenience that online shopping affords. However, the use of credit and debit cards exposes sensitive personal data and has at times made shoppers the victims of fraudulent acts.
Request network uses the inherent security of the blockchain to protect user data. You don’t need to provide your bank details or other personal information to make or receive a payment online. At the same time, its decentralised nature eliminates the need for third party intermediaries, allowing for cheaper transactions.
Business invoicing
B2B invoicing is to a great extent still manual. Companies use hard copies and emails to request bill payments. The Request system has a comprehensive accounting feature that generates bills and allows for sharing over its ledger.
This shared database is automatically updated with every transaction which reduces the need for duplication of efforts in B2B record keeping.
Job automation
As mentioned above, the accounting aspect of the Request network automates most accounting roles so that payments and even tax refunds are automatically recorded. Additionally, the blockchain system is easier to audit and its immutability ensures transparency in business operations.
Other commercial tools
Commercial tools related to factoring and escrow are easily accessible on the REQ network for both individual and business use. This adds much-needed convenience and security to transactions involving huge sums of money.
When making payment for a service or product, one can choose the escrow option to ensure funds are only delivered upon satisfactory delivery.
REQ token
The REQ token is the medium used for transactions on the network. It is charged for the operation of contracts, particularly extension services like taxation, escrow, late fee payment and deposit placement. Fees charged are distributed in the ratio of 30% to the extension developer and 70% to the token holder community.
Transaction fees will range between 0.1% and 0.5% of the total transaction value of every extension service used. It will be possible for users to request an accumulation of extensions so as to make a single payment. The more users the platform has, the higher the value of the token is expected to be.
Why should you consider buying REQ?
Low cost
Compared to existing payment systems, REQ is highly cost effective. Transaction fees on major payment service platforms range anywhere between 1% and 7% of total transaction value. This means that the aforementioned 0.1% to 0.5% range is highly economical.
Easy to use
Even though blockchain transactions are usually a bit complex and require some knowledge of the system, the use of REQ is quite intuitive. Most transactions are executed with a single button click. Another aspect of its simplicity is the fact that customers can make payments using any currency and the system will carry out the necessary exchange.
Secure
Transactions on this peer-to-peer network are to a large extent risk-free. When a user makes an online purchase, they receive a payment request from the business and upon confirmation the automated process does the rest.
REQ’s early success
The final draft of the REQ whitepaper was launched on 25 October 2017. The six-member team behind the project is the same one that created the Moneytis project. Just like Moneytis, the Request project has the support of Y Combinator.
The project is already ahead of schedule as the planned launch for a working Minimum Viable Product by Q1 2018 has already taken place. REQ prices dipped after the ICO but have gained more than 500% since then, showing the public’s optimism about the concept.
How to buy REQ
Create a crypto wallet
There are different types of wallets to choose from but one of the easiest to use for REQ is MyEtherWallet. It can hold any coin that is built on the ETH network including REQ. All you need to do is to log on to myetherwallet.com, choose a password and create a new wallet. Follow the procedure to generate your private address.
After getting your private address, you need to get ETH tokens to exchange them for REQ. If you already have Ether, you only need to choose an exchange platform and make the exchange to get your stash of REQ tokens. If you do not have Ether, you can make the purchase from your preferred exchange and then convert it to REQ.
Choose an exchange platform
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Choosing an exchange platform is normally a matter of convenience. One of the most important factors to consider is the payment method accepted on the platform. Some will allow you to use bank transfers while a few others allow for money transfers via popular platforms like PayPal. Pick out the most convenient one for you that is available in the UK.
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Once you pick out your preferred exchange, you will need to buy ETH. Register on the exchange chosen so as to get the address where you will send the ETH tokens. Send your ETH to the specified address. You can confirm the deposit by checking in the “Deposits/Withdrawals” section. Go back to the exchange platform and convert the ETH to REQ tokens.
After making the purchase, it would be best to transfer the tokens to your wallet for security purposes and ease of access.
Other ways to get REQ
There are other methods to get REQ that could be more convenient than the above. One of the easiest is to get REQ tokens in exchange for products and services you could offer. Another option is to accept donations in the currency.
A key point to note is that when buying REQ, the best time would be when the market is undergoing a slump and people are willing to throw it away. It could then earn you a handsome profit if you hold on until the market recovers and demand for the token goes up again.
*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
Charlie Barton was a publisher at Finder. He specialised in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach. See full bio
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