It's three times longer than you would like, and there is some content out there about CUB and unsuitable stuff. He also asks me to talk about some things about taxes, and I'm thinking of adding privacy-related stuff.
This post is basically a remake of this post ... hopefully good enough for what it's looking for. I need to simplify my old post and make it delicious for beginners and a wider general audience.
The cryptocurrency world is an incredibly complex, potentially frustrating and frustrating place. When should we buy it? When should we sell? What are the best projects to invest in? How do we protect our assets from theft? Who do we trust to give us advice and help us build a stable foundation?
Crypto is a raw and emerging asset class with exponential potential that requires great guidance for those who have no idea what they are doing. That's why I have compiled a top ten list of these mandatory instructions for new users entering the field, or anyone who feels lost and has many questions.
Rule 1: It is a Bitcoin Gateway
The first mistake many new users make is to ignore Bitcoin. That's exactly what I did three years ago. Everyone wants to be rich as soon as possible. Everyone is looking for "Next Bitcoin". I am here to say that "The Next Bitcoin" is Bitcoin itself. These networks are alive and are expanding at an exponential rate. Bitcoin is at the top of its class.
If you are wondering which crypto to put your money in: the answer is automatically Bitcoin. Once you have some experience with the big dog, you are free to slowly dive into more complex webs. At the end of the day, Bitcoin is extremely volatile and risky compared to the old asset classes, but compared to other cryptocurrencies, Bitcoin is the safest and most secure piece of property you can hope to own. This is a great starting point for anyone and the mainstay for this entire developing universe.
Rule 2: Ignore Unit Bias
Our brain likes it when we complete a task and gives us a reward for doing it in the form of a dopamine hit. The human brain is a fascinating tool that can get us into a lot of trouble in certain contexts. For example: how many times have you had a very large meal just because you wanted to complete it? This is the most common form of unit bias studied by scientists.
In the context of crypto and especially Bitcoin, unit bias tricks our brains into thinking we should have an entire coin. Now that a single Bitcoin can handle over $ 50,000, this falsely leads the vast majority of people to believe that Bitcoin is "too expensive."
Of course this is totally absurd. Bitcoin units are completely arbitrary. If we all collectively decided that 0.001 Bitcoin is actually 1 Bitcoin, then that would be the new reality and we would change the metering system to x1000 accordingly.
A very easy way to escape the negative effects of unit bias is to stop measuring Bitcoin in Bitcoin and instead start calculating that wealth using the smallest possible measure: 1 Satoshi. A single Bitcoin consists of 100,000,000 Satoshi (often referred to as "sell"). So instead of feeling dull after spending $ 500 for just 0.01 BTC, we have to tell ourselves instead that we bought a million sats for $ 500. This helps the brain deal with the loss of misperceived unit bias.
Rule 3: Stop trying to time the market
It's not about timing the market, it's about time in the market. While the forecast is legally blind, the market backward view is always 20/20. Nobody can predict the future. Stop worrying about when you will enter the market and be ready to be off the market for a long time.
Rule 4: HODL
Don't panic when the market crashes. The market is collapsing all the time. Most investors seem to have a goldfish memory. They complain of taking a 30% loss immediately after gaining 200%. This is not the stock market. A 30% retracement is standard, even in the strongest bull markets.
Rule 5: Average Cost of Dollars
DCA is an excellent tactic that surprisingly requires an enormous amount of self-discipline. When the decision to buy or sell is made, we need to enter / exit the market slowly over time with stable hands. This reduces volatility and reduces our exposure to these highly volatile markets.
It seems like we always have our number one in the crypto markets. It will rise somehow every time we buy and every time we sell and fall. It is much better to spread these orders over weeks or even months than to make hasty decisions at once. Stop gambling in the market by moving all-in and all-out on the seat of your pants. DCA instead, you'll be glad you did! The slow and calm wins the race.
Rule 6: Decentralize your assets
Coinbase, Binance, Bittrex, Huobi, Kraken etc. Anyone who hides all their money on a single exchange wants trouble. Centralized exchanges create honeypots and make great targets for hackers and other thieves. By storing our cryptocurrency in multiple locations, we can greatly reduce the risk of destructive loss.
Many will tell you to never keep money on an exchange and only use hardware wallets such as Trezor and Legder. This could also be a mistake. If all of our value is parked in one place, that makes it much easier to get lost or stolen. Depending on how much money is at risk, it's smart to access multiple exchanges, multiple hot wallets (smartphone apps), at least one hardware wallet, and maybe even cold storage.
More casual users who only risk a few thousand dollars or less can easily get away with just using centralized exchanges and / or apps on their phones. However, crypto has a way to generate exponential gains. You can find it in 5 years on the road where your few thousand dollars turn into several hundred thousand and you will definitely need to increase safety along the way.
Rule 7: Community is key
Cryptocurrency is all about building communities, building innovative governance structures, and participating in this massive emerging experiment. It's often a good idea to support communities you want to succeed, such as investing in a company or even donating to charities. Personally, I only invest in networks that I actively use and participate in. Playing the game of speculation about what might happen is a slippery slope while being active in these various communities and putting your money where your time comes becomes a much more satisfying bet. .
Rule 8: Don't trust anyone.
The whole purpose of cryptocurrency is to build unauthorized and insecure systems that do not require us to attach our faith to a central authority. Cryptography acts as an intermediary. Algorithms and smart contracts give us the tools to convey value to others and receive payments for ourselves, without having to rely on the other party to remain dignified.
If someone asks you for your private keys: they are a scammer. If anyone suggests investing in a new project, be very careful to risk your hard-earned assets for new experimental products. Many new development teams give themselves full control and can steal anyone's money at any time. This is often referred to as an 'exit scam' or 'mop'. Be very careful: If it sounds too good to be true, it probably is.
Rule 9: No silver bullet
Rooting for a particular cryptocurrency can be like rooting for a sports team. Everyone wants their team to "win". There are many mispercepted rivalries in space. Remember: The term "Ethereum Killer" is a completely wrong name. Few of these networks actually compete with each other. Open source code does not compete with open source code.
This is a cooperative economy where everyone helps substantially all. When a project produces an extremely valuable piece of code, that code is distributed and reallocated to all other projects that find that code valuable. Interoperability across networks and collaboration between developers is imperative.
Blockchain technology is an extremely inefficient database that stores hundreds, if not thousands, of the same information on the same number of servers. In general, the more inefficient and expensive to use a network, the more secure, robust, and decentralized the network becomes. Security, trust, and decentralization come at a high price.
There are many tradeoffs to consider when building a new network. Any platform that claims to be fast, decentralized, secure, and scalable at the same time is selling you a lie. No one cryptocurrency can do it all, and most of them have their own niches and divisions to play in this living ecosystem as they work together to achieve a common goal: freedom and trust among large communities.
Rule 10: A journey, not a destination.
Cryptoverse is a living and breathing entity that is constantly evolving and improving itself. It moves with the fists and adapts to the constantly changing environment. Like life itself: there is no end to the journey. An individual may die, but the story goes on forever. An individual may be vulnerable, but the whole is much greater than the sum of its parts. Crypto is alive and will defend itself accordingly.
Result
I hope these guides help new users as they try to navigate this complex and confusing space. When in doubt: choose Bitcoin. Do not keep all your eggs in one basket. Stop gambling and start investing. We are all in this together.
yeah, you are right on point the only difference is that to me when you say Bitcoin what to me is Bitcoin I understand it as Bitcoin Cash. If people were to make a little research before buying any cryptos they will soon realize that the real Bitcoin is Bitcoin Cash, and dollar cost averaging will be the death to many holders of Bitcoin Core because when you accumulate many transactions that are below $20 those $20 will be burn money in the future once transaction fees go beyond $20.
If you are poor and can only buy $100 or less at some point your money will be worhtless if you leave in Bitcoin Core because transaction fess will make your inputs worthless, you will be cost averaging to burn your money away. as today Bitcoin transaction fees are $18 Fri, April 23, 2021. If you have been accumulating Bitcoin with less than $20 dollars and you need to sell your transaction won't be enough to pay for transaction fees, which equals you are burning money.
And in the future when transaction fees go to $100 those that accumulated with transactions smaller than $100 will lose or burn their money. What you wrote is find the only thing that you forgot to tell people is to look into what bitcoin really is and if they should invest into something that is so high transaction cost.