Investing in Bitcoin and other altcoins can be tempting looking at their returns. However, you should not jump in the boat without having any basic knowledge. Many people have lost thousands of dollars because they had no idea that they can lose their money. Since the blockchain concept is very new, people can be easily tricked and you may lose the entire sum in no time. So, I recommend you to take your time and learn about Bitcoin, altcoins, and blockchain before jumping in the crypto world.
5 Things to Know before Investing in Bitcoins
Bitcoin and other altcoins are highly volatile
Please understand that Bitcoins and other altcoins are highly volatile. You may lose a good amount from your portfolio in no time. On December 2013, Bitcoin fell from 1000 USD to 250 USD, and then it took some time to recover. Just on September 4, when China called for an ICO ban, NEO and many other altcoins fell down drastically.
Neo was down from 30 USD to 18.5 USD and everything happened in less than ten minutes. If you have weak hands, cryptocurrency might not be for you. Take this seriously.
Also read: Should you buy NEO?
You may lose your money anytime. It is risky and I mean it. If you do not know how to keep your Bitcoins secured, any hacker may hack and take all your Bitcoins.
What should you do?
You should store your Bitcoins in a wallet and store your private key safely. If you lose your private key, you may lose your entire money or it may not be accessible.
Fake coins are everywhere
With the growth of cryptocurrencies, there has been a massive growth in the number of fake coins with no relation with technology getting launched. They are linking cryptocurrency with MLM scheme. One perfect example is the ATC coin. It is purely an MLM scheme. Well, if it is an MLM scheme, why do you name it a coin? People do not understand and fall for quick money trap. Instead of wasting your money in shitcoins, it is very important that you invest your money at the right place. Have a look at these 20 altcoins that looks technologically strong.
Phishing Sites and Scams
Scammers launch a similar looking website to fool the users. It is advised that you check cross verify everything before going ahead. And if anyone asks for a private key, even if you think that this is real, never ever share your private key with anyone. Anyone with your private key can access your money.
You should stay alert when you see this
- Airdrop news
- Setting up 2FA
- Any notification from Slack, Twitter asking you to send Ether/Bitcoin or any other coin.
What should you do to stay safe?
When you create accounts with exchanges, do not forget to enable 2FA.
Buy a Ledger S or any hardware ledger and shift your coins to the hardware wallet, if you are planning to hold it for a long time.
Not every wallet may support the coins you have.
Before sending money to anyone, verify his/her address before sending. If you send coins to an incorrect address, you are never getting back your coin.
What are crypto investors saying?
I asked my group members to share one thing that they think a newbie must know and this is what they said:
1. Narendra Kamal - Do not be too greedy.
2. Sohaib Siddiqui- If you spend at the right coin, no matter how down it goes, you are never in a loss. Sooner or later u will recover and get over it. You are only at a loss when you sell it.
3. Jaya Chandra Reddy - One should invest only what he can afford to lose. Secondly, long term investments will give more returns than short term
The best thing would be to meet/talk to a cryptocurrency consultant before you start investing. 1 hour of consulting should be more than enough.