The DOs and DON’Ts in cryptocurrency you should know as an enthusiast of digital currency — Lecture by the CEO of TBT, Egu Chris.
For the interest of the readers, especially newbies in the digital currency world, we’ll be modifying the lecture for more proper understanding.
1. Do: Secure Your Assets
The security of your assets (coins and tokens) should be your major priority. If you are a very careless person, you need to work on adopting the habit of absolute carefulness before venturing into crypto because you might lose everything you have laboured for, in a single minute if you toy with the security of your digital asset(s).
On this note;
👉 Don’t store coins/tokens on any wallet or app that has low security architecture. Avoid wallets that lack 2FA, encrypted private key and other top security features.
👉 Only a relation you trust extremely well in the case of emergency deserves to know about your crypto portfolio and how to access your assets/tokens. No other person should have access to your wallet, crypto apps and others.
👉 Don’t leave your coins on 2nd Tier exchanges. These exchanges can easily be hacked.
👉 All the useful crypto apps on your device should be on high pin/password and always have a backup plan for your device in case of emergency. Hardware wallets are more secured. You can consider them. I will explain more about this, subsequently.
- Do: Double-check transaction information
Due to the immutability of blockchains, transactions can’t be reverted. So always double-check the correctness of your transactions before executing them. Verify links of sites before using them to avoid dropping sensitive informations on a malicious website.
3. Don’t: Brag about your holdings
By bragging about your profits and large holdings you only make yourself attractive for potential attacks. Also nobody likes braggers.
4. Don’t: Fall for scams
If it sounds too good to be true it probably is. Guaranteed returns of 20 % or more should be treated with great suspicion. Representatives of crypto companies (like wallet provider or your exchange) will never ask you for passwords, private keys, your recovery phrase and won’t contact you personally on telegram or other social networks! 99% of crypto investment platforms are likely to be scam. Avoid all shady investment platforms and try to indulge in series of researches before any other thing.
5. Don’t : Follow the mass media hype
Speculations and predictions about the price of cryptocurrencies is like a beautiful prostitute — She might look gorgeous, but in the end she might gift you HIV/AID free of charge 😀 Especially mainstream media, which is controlled by a small elite has no incentive to provide the average user with useful information about financial self-sovereignty. The best thing is always do your own research before diving in. This will make you strong against media manipulations.
6. Don’t: Overwork (overtrade)
The mental system needs rest. If you always stress yourself out on a daily basis, you might experience negative effects which could be disastrous. If you get tired, quit for the day.
While you consider crypto trading business, I have 5 things to tell you.
1. Don’t Invest The Amount You Can’t Afford To lose
The value of coins go up and down. Virtually every second, the value changes in respect to demand and supply. This should arouse the trait of carefulness in you.
Cryptocurrencies can be affected by hacks and bugs which could lead to an unforeseen calamitous circumstances hence the reason why I don’t even advise people to leave all their entire networth in crypto. When people preach about investing and saving in $$, it doesn’t mean go and empty your bank account and use everything to buy crypto.
It connotes investing part of your money in crypto & not everything.
Cryptopia exchange was hacked about 3 years ago and over 20 million dollars worth of crypto was stolen. Those who fell in victim of the cyber attack are yet to recover their hard earned money till today
The crypto market is highly volatile but if you hold your positions and make good decisions, you will rarely experience major losses.
I’m not saying this to scare you away from crypto. It is my personal opinion which is based on experience.
2. Do your own research: #DYOR
This goes with any sort of investing, but it is particularly more important in cryptocurrency. Research the coins you are considering buying to make sure they meet your investment goals without sending you to village.
Remember, an investment in a coin is an investment in the team or company that generates it. If the team behind the coin is not potent enough, then you have to play safe.
3. Avoid FOMO (Fear of Missing Out)
There is always a lot of hype around cryptocurrencies. This can lure people into buying coins at a high price, only to lose money if the coin’s value drops.
Don’t invest in a coin or token just because there’s a huge buzz around it. Utilise my number 2 point in this regard (DYOR)
Meanwhile, those that used their house rent to buy BTC when it was $42,000 with the hope of selling $45,000 after some days are currently in a state of total discomfiture (that is what FOMO can cause)
I stated this in a group when BTC fell from $42k to $32k. A lot bought and panic sold. That is why you should not follow crowd and act based on your research and instinct.
4. Take profits at intervals
If you watch the crypto market closely, you’ll see that values can increase and decrease at any time. In fact, some coins can manifest 5% increase within 5 minutes and they can equally manifest 50% decrease within few minutes. This is the major reason why you should take profit at intervals instead of waiting for a remarkable increase before taking profit
If you’re doing short-term trading and see a large increase in value, you might want to see if the value will increase even more. But what goes up must come down. So by setting up a strategy where you’re taking profits at regular intervals, you increase your likelihood of getting steady returns.
5. Use stop-loss for day trading
A stop-loss is when you set a specific price at which you would sell a coin if it start dropping in value, useful for protecting yourself against major losses.
Here are the things to consider when making a crypto research:
- How reliable is the team behind the project?
- How many partnerships have they secured?
- What services are they rendering?
- Have they launched these services?
- Circulating supply, max supply, price history and other stats.
- Exchanges listed on.
- Roadmap and how far they have gone.
If you want to start cryptocurrency, you can use any of the following wallets; Trust wallet, Metamask, Coinbase, TronLink Pro, Token pocket.
If you want to be getting verified news on cryptocurrency, you can use the following mediums; Verified Twitter handles, Cointelegraph, Binance news, Coinbase news, Coindesk, Kucoin news.