Into the Crypto pit!

So, after days and weeks of snooping around and getting bombarded by the word “Bitcoin” day and night, you have finally decided to take the plunge! Good for you. But you are still unsure- Is it a bubble? Will it crash? Will I be a millionaire?

Although there are no 100% guaranteed ways in which you can double or triple your money, following the tips below will definitely help you avoid some of the common pitfalls.

*You can play this game and come out unscathed?*

Invest in technology not on hype

Don’t buy something you don’t understand. If you are investing in something, then make sure what the product/platform is, what it can offer and how it will develop down the road. The first stage of a product research is to go to coinmarketcap.com and type in the coin. See its price, circulating supply and total supply. A low price (less than $1) doesn’t equate to high gains in the future. If XRP value hits $5 (current price $1) today, it means it will overthrow Bitcoin (current price $10k) and become the most dominant coin. Now think for a second. How likely is that? Not so likely.

TRON (TRX) was one of the most hyped coins in the December of 2017. Within weeks, it tripled in its value. Majority of people, got in on the hype train and bought at all time highs. Then it just plummeted and returned to its pre-hype period price. Those who bought at top were left holding the bag.

Check out if there is still buzz in the community for the project you are interested in. This website lists all the dead coins that has hit the virtual graveyard. You do not want to invest in something which would end up similar.

Go to the project website and try to understand their whitepaper. See what problem the team is trying to solve. And after doing all this, if you’re still convinced and you think it is a good project, then head over to the exchanges tab to find out in which exchanges they are sold.

2. Always withdraw from the exchange

Ya, I know everyone preaches this 24x7, so I will keep it short. Trusting third parties is not what this ecosystem stands for.

After finding out the exchanges, make an account and check the trading of that coin. Opt for an exchange which has high liquidity/volume and low withdrawal fees. You can check the withdrawal fee for any currency by going on the withdrawals tab.

After trading or buying, the first thing you must do is to transfer it to your wallet. If the amount is significant, use hardware wallets like Ledger Nano or Trezor. If it is an ERC20 token, use MEW. Other wallet options include Exodus, Jaxx, etc.

This is because an exchange is a honeypot. It is a single point of failure when attacked. Every month (January, February), we hear a new exchange getting hacked and hundreds of millions of dollars worth crypto being stolen.

3. Always protect ya neck

Never trust anyone. You should keep a separate clean browser only for cryptocurrency trading. Keep your Google chrome for day to day internet browsing. Browsers like Opera, Firefox or Brave are recommended. Make sure there are no add-ons and flash is disabled. After each session, make sure you delete the cookies. Do not save/autofill passwords for these websites. Use password management softwares (recommended: Keypass) to help you remember the passwords. Do not use public WiFi to access these exchanges/wallets.

Never use your primary email address for signing up in exchanges. Create a new email id and never share that with anyone.

Always enable two factor authentication (2FA) on exchanges and websites. If you’re using Google authenticator, make sure you back up the secret key before scanning the QR code and simply signing up. If you are afraid you might lose your phone, then you can try the Authy app. It has a central password and save all your 2FA on the server so that you can access from any phone.

If you are trading frequently, download the entire history (CSV file) of your exchange transactions periodically, if possible with IP addresses. This would help you if you screwed up your 2FA or password in an exchange.

Keep a portfolio tracker in handy. Apps like Blockfolio, Delta or websites like coinlib.io, cointracking.info are a few good ones. Record each and every trade you make meticulously by combining all the exchange trades. This would not only keep you organised but also would come in handy during tax season as especially some countries want you to declare profits in each trade.

Do NOT disclose how much crypto assests you have to anyone!

4. Thou shalt say, “NO!” to scams and shillers

There are a lot of online groups and “influencers” who try to push their agenda on to you. You can find these kind of people all over the internet- on twitter, on YouTube, on telegram etc. Because they have a large following, people blindly trust them and throw their money. This increases the demand and jacks up the price and this further ensues a herd mentality. The truth is most of them are paid to promote a particular project or get paid by referral. So always take their words with a grain of salt. Invest only in projects you trust and not because some random person on the internet told you to do.

5. Do not panic sell!

Bought BTC at $19k, but now is at $8k? Do not sell! (if you believe in BTC, buy more so that your average dollar cost reduces).

If you are new in this, then chances are you might not be accustomed to wild volatile market swings. You may buy a coin/token and it may go down 20–30% in one week. If you have done proper research, understand and believe in that project (see point 1), then do not panic sell. Just hold and wait until the dust settles. Market corrections and pull backs happen all the time. But you should be in this for the long haul. If you panic sell at loss, there are other people who are willing to just engulf your sell orders.

6. Never go all-in in this game

Pouring all your savings into cryptocurrency investment and trading would be one of the stupidest things you could do. Only allocate a portion of your savings which you are willing to lose. Investing 100% of your savings or taking loans and mortgages on your home to invest in crypto is not a good idea. The whole thing can go to zero tomorrow- there is no guarantee. So if someone says they can help you double your investment in one month or one year or anything, do not believe in them.

Another important thing is to diversify your portfolio. If you have a disposable income of say $1000, do not invest everything on one cryptocurrency. Research a bit more about other projects or even its competitors in the same space and then distribute your investment. This also doesn’t mean you should invest in 20 different currencies with $50 each- that would be less profitable.

7.Know where you are getting your news from

Recently, there has been a lot of uncertainty and fake news about cryptocurrency in the mainstream media. With Korea FUD, China FUD, India FUD to name a few. So if you are following mainstream media to get your daily news, then always be skeptical and don’t take everything at face value.

Some of the trusted outlets include coindesk and cointelegraph. You can also check out telegram channels like Bitcoin.com and crypto samurai. UK Crypto is a pretty good telegram community as well. They are backed up technical analysts and crypto enthusiasts who will regularly post updates on market actions and trends.

Some good YouTube channels include Datadash, Ivan on Tech, Boxmining, Crypto Bobby and Crypto Candor.

That’s basically it! Strap on your boots and let’s ride this magical cryptocurrency train!

If you liked my article, please clap on it so that it can reach a wider audience.

My favorite exchange: www.binance.com/?ref=11229171

lisahuckinsds’s blog

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Into the Crypto pit!

Into the Crypto pit!