What is crypto? Crypto stands for cryptographic currency and refers to any currency that works using cryptography as its foundation. There are dozens of different types of crypto, but the most popular ones are Bitcoin and Ethereum. In this article, we’ll cover eight things you should know about cryptocurrency in general—and if you’re curious about how to invest in crypto, or how crypto can make you money, don’t miss the sections on investment strategies and security precautions at the end of this article! We are sure can say this article will work for you as the blessing news.
1) Invest Only What You Can Afford to Lose
Investing your life savings in crypto is a bad idea because if you lose your money, you’re up a creek without a paddle. But even putting aside a portion of your life savings is risky. There are many crypto experts who have been tricked into investing all of their money and losing it all. Don’t let that be you! Invest only what you can afford to lose because guess what? The crypto market will crash—it has before and it will again. It might happen years from now or months from now, but whenever it does, some people will make millions while others lose everything. Only invest an amount that won’t affect your lifestyle if things go wrong (we hope they don’t!).
2) Exchanges Are Not Always Reliable
If you’re just getting started with crypto, you’ll be tempted to simply exchange dollars for your tokens of choice on an exchange. However, exchanges are not always reliable and can close at any time. Since its inception in 2009, Mt. Gox was one of bitcoin’s biggest exchanges before its collapse in 2014; it caused customers to lose hundreds of millions of dollars worth of bitcoin (at today’s value). This is a prime example of why storing your currency on an exchange is a good idea. There are several secure wallets available online including MyEtherWallet and MetaMask (more on these below). To access your crypto safely off an exchange, create a paper wallet that allows you to store your public and private keys offline.
3) Don’t Overly Trust Popular Mediums
This is something that people often see as a positive, but it’s actually something to be careful of. If everyone seems to be talking about a cryptocurrency, especially if you don’t know much about it, it can seem like one of those things where this time is different. But there are hundreds of cryptocurrencies out there and nearly all of them will fail in some way – may be even spectacularly so. The risks are real and significant. One can go wrong in many ways: accidentally leaking personal information through an unsecured connection or persuading a user to unintentionally send crypto to an address belonging to an attacker as part of a phishing scam.
4) Keep Your Cryptocurrency Account Safe In
All cryptocurrency accounts are not created equal. Some are far more secure than others, so make sure you select an account that’s equipped to handle a safe and controlled transfer of crypto assets. How do you do that? Look for two things: first, an account with two-factor authentication. This is an important security feature that makes it much harder for hackers to break into your account (but also means it’s a little bit harder for you to access your own funds). Second, look for an account with offline storage. If a hacker can’t get at your wallet file—which they can’t if it’s stored on a computer you don’t have physical access to—they have no way of stealing your coins.
5) Don’t Get Scammed by Fake Promises About Cryptocurrency
In 2009, a person or group using the name Satoshi Nakamoto published a paper introducing bitcoin and then built on it, creating an alternative to official currencies in countries like Venezuela where citizens can’t trust their government-backed ones. According to Markets Insider, Bitcoin is essentially digital money that cuts out banks and credit card companies. So if you’re into things about crypto, why not hop on board? Don’t worry about nailing down every minute detail just yet—after all, BTC was trading at around $632 USD in May 2017 when this story was written. That might sound pricey for now but don’t worry: It’s only going up from here!
6) Diversify Of Cryptocurrency!
Diversifying your portfolio into multiple cryptocurrencies is essential for minimizing risk. If you were to invest all of your money in one coin, it would be impossible to predict how that coin will perform against others—and many times, even if a single cryptocurrency succeeds, others won’t. By spreading out your investments into different cryptocurrencies and several different companies, you can protect yourself from anyone coin faltering while still enjoying massive gains if one or more of them take off. There are hundreds of crypto projects and we highly recommend doing research on each before investing in them. For example, every company listed on CoinMarketCap has a detailed profile with key information such as team members, website links, headquarters location, and real-time price quotes.
7) Patience Is Key (And Super Difficult)
To protect yourself, do as much research as possible. Find out everything you can about blockchain technology and what it means for businesses and users going forward. If you’re still not sure whether to invest, don’t. There is no hard and fast rule here – but only invest what you can afford to lose if things go south. Don’t be tempted by high returns from investments or promises of massive future wealth. If an opportunity sounds too good to be true, it probably is!
8) Read, Learn, and Research Before Investing
When most people think of investing, they think of stocks and bonds, or at least something that involves money. In truth, an investment is almost anything you make—the only thing required to be an investor is taking a risk. With that in mind, before you consider crypto investing. Look into other types of investment that can help prepare you for your crypto investments. The main lesson to learn here? Don’t jump into anything; do your research and be informed before putting your hard-earned money at risk!
This is just a shortlist of all that crypto has to offer. Do your own research and learn as much as you can about all of it if you’re still in doubt. Cryptocurrency is going to change how we look at money and digital security for good.
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