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Common Possible Mistakes Of Cryptocurrency Users

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Written by   119
2 months ago

Cryptocurrencies are too sensitive and complicated for the newbie individuals who are trying to enter the crypto world. Some of them are losing money without knowing the reasons. Some of them are are accidentally committed unwanted and unexpected activities that caused losing of their cryptocurrency funds.

These things can be avoided when you have known the following mistakes usually experienced by newbies in cryptocurrencies including myself. These can help you to save your funds from possible mistakes.

 NOT BACKING-UP YOUR WALLET

Cryptocurrencies like Bitcoincash put you in control of your money. With that control comes certain benefits. For example no one can freeze your account, no one can forcibly seized your funds and no one can block your payments. That control also brings with it the need for personal responsibility. Your funds exist on the decentralized ledger called the blockchain and your private Keys stored in your cryptocurrency wallet give you the ability to spend those funds by signing transactions. If you lose access to your private keys due to loss theft or damage, you lose access to your money and it's lost forever. There's no blockchain support hotline or identity verification process to get it back that's why it's pivotal that you backup the private key of any wallet where you want to store more cryptocurrency than you can afford to lose. Most wallets software allows you to backup your private key by writing down some number of seed words you can then regain access to your funds by importing those seed words into another wallet.

 TRUSTING NOT VERIFYING

 Every source of information has an agenda. Sometimes that agenda will involveaccurately educating you to the best of the sources ability and other times. It will involve purposefully misleading you some sources will even think that they are passing on good information but will have let their conflicts of interest. that's why it's up to you to verify factual statements using original sources question assumptions and opinions that are given without factual support and look for conflicts of interest. Not as reasons to disqualify information by default but as reasons to be extra skeptical.   

STORING ALL OF YOUR FUND IN HOT WALLET

Your private keys that let you spend the cryptocurrency you own but anyone else with access to your private keys can spend your money too. Without your permission, any wallet that stores its private keys on a device that connects to the Internet is referred to as a hot wallet. For example, desktop wallets and mobile wallets store your private keys on your devices storage and that storage may or may not be secure depending on your devices software and your personal security related habits. In order to protect your cryptocurrency from hackers who would try to compromise your device you can instead store the majority of your funds in cold storage. that is a wallet whose private keys are never exposed directly to the Internet. There are many different cold storage solutions each with their own benefits and trade-offs including Hardware wallets, paper wallets and even fireproof and flood proof solutions where your private keys are stored in durable metals .

STORING YOUR WALLETS ON AN EXCHANGE

When storing your coins on an exchange or any custodial service, where you don't have the private keys that control your money you're trusting that custodian to both give the money back to you when you want it and keep the money safe while it's in their custody since exchanges hold large amounts of cryptocurrency for their users they're actively targeted by hackers and thieves hundreds of millions of dollars worth of cryptocurrency has been stolen from exchanges in 2019 alone untrustworthy exchanges have also been known to exit scam taking whatever money is currently deposited on their platform and running hoping to get away with it scot-free you can avoid having your money disappear due to hacks and exit scams by only using exchanges to trade and then withdrawing your funds to a wallet you control as soon as possible

TRYING TO TIME THE MARKET

The cryptocurrency markets are largely unregulated regardless of whether you think that that's a good thing or a bad thing. It means that they can be manipulated by large players to siphon money away from day traders and retail investors you may be tempted to buy. When you see the price going up or sell when you see the price going down or even vice-versa, but there is a good chance you will lose money trying to buy low and sell high, the safest way to enter the market if you decide to invest in cryptocurrency is by dollar cost averaging where you invest a fixed amount at regular intervals protects you from short-term price swings and you still profit if the prices go up in the long term.

INVESTING MORE THAN YOU CAN AFFORD TO LOSE

The markets are incredibly volatile. It's technically possible for any crypto currencies price to drop by any amount at any time. If you invest more than you can afford to lose you're gambling with your well-being and the well-being of anyone who depends on you so before you decide to invest. Ask yourself if every cent I want to invest disappears tomorrow will I be okay.

Hoping that this will help you too avoid losing of money. Be smart when your storing and keeping your funds.!

 

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