If you’re looking into cryptocurrency as a tool of investment and as a strategy for growth then you might be coming to the right place. But if on the other hand you see blockchain as a vehicle to get rich quick then you may be in for a rude awakening. Much like the stock market or a casino, it could be a house game where more than likely the house wins. However, if you’re smart, play your cards right, administer patience during the red times and humbleness during the green times, then you could realize some pretty decent profit and this is a guide on how to do so. I’ll be covering some of the basics along with some tips and tricks.
RULE 1: The biggest and most important rule is to only buy as much as you’re willing to lose.
Be comfortable with knowing that if you’re buying something, except it’s value to go down more than up. This isn’t being pessimistic, it’s being realistic. This is just so you can brace yourselves for serious impact. More than likely if you’re a human being, you have someone or something that’s dependant on you. You need to use this investment as something independent from your personal life so that you don’t cause yourself a great deal of misery if the market goes down. This is because there’s catalyst’s outside your control that will affect the market such as hacks or a government agency freezing an exchange for investigation. There’s been moments where a network is so congested that a transaction could take hours or where an exchange is down for maintenance. I’ve even seen instances where a company pauses it’s own smart contract. There’s times where you don’t immediately have access to your crypto funds because of small nuances like what I just described. If you’re in a pinch, cryptocurrency might not be the best strategy and definitely keep your day job.
It costs money to make money and if you don’t have a bunch of money to begin with then chances are it’s going to stay that away. Also the opposite is true, you can start off with large amounts of fiat currency and end up with little. The best thing to do is buy now, use time to let your assets in this company grow and sell when the time is right. There’s a ton of psychology that goes into new markets and it’s best to be aware of both the pros and cons. In order for you to succeed as a seller, there has to be eager buyers (and vice versa).
RULE 2: Be aware of FOMO. Buy Red Sell Green. (Even better, buy before there’s a market.)
Now that we’ve covered some of dangers, let’s move onto some of the pro’s. One of the beauties of Initial Coin Offerings, was that it allowed people to buy into company or teams they believed in, before they go for sale on a market. It allowed you to take a huge risk and have your patience rewarded. That was in the hay day of ICO’s. But today, ICO’s have had a bad rap for being exit scams, manipulated pump and dumps and conduct other shady practices. Unfortunately, there is a bunch of “shit coins” out there and always consider the fact that you could lose all of your money in an ICO no matter how reputable or good you think the company is. With that being said, I have hope for the future of ICO’s and you shouldn’t let a few bad apples spoil the bunch. If by chance you’ve found a good team, you’ve bought in the ICO or Pre-ICO, you’ve hodled, you’ve been patient, the company grows and gets on several exchanges, they see volume and you’re ready to realize profit, then you can make some serious gains. If you see a coin go up for than 10% in a 24 hour period of time, it’s probably not the right time to buy. Don’t let the fear of missing out drive you to buy something at an ALL time HIGH and then get stuck with it. Always check volume, anything in the hundreds of thousands and I’d be skeptical. Cryptocurrencies can be easily manipulated and it might be a good idea to take advantage of the volatility by entering the market on a downward turn instead of an upward one. If it’s red one day, it could be green the next and vice versa.
RULE 3. PROTECT YOURSELF
Never divulge too much information about your cryptocurrency assets. Better yet don’t divulge any information about your cryptocurrency. If you have a large holding, that could make you a target. Do research on security. If you’re new to cryptocurrency only start with very small amounts, in the 1 to 2 digit range tops. Be aware of miner or transaction fees. Do this until you’re familiar with the cryptocurrency ecosystem and how transactions interact with one another. Blockchain is made up of many different components and it’s important to grasp how they all interact with each other. There’s a few basic things that are common with most blockchains such as the difference between a private key and a public key, whether a coin is based on a bigger blockchain or it has its own blockchain, etc. Again, always have an understanding before you attempt to do anything. Blockchain is irreversible. Once you send and transmit a transaction, it is permanent & can not be intermediated (for the most part). Know what the difference between a paper wallet and hardware wallet is. And NEVER KEEP YOUR FUNDS ON EXCHANGES FOR EXTENDED PERIODS OF TIME. I repeat, do not let your funds sit on exchanges because exchanges get shut down all the time. Always put your information someplace you know is
RULE 4: DYOR, DYOD
Do your own research. Have patience and do your own diligence. We live in a world full of schiller's and fudders. It’s very important to ask why and how. Remember, have fun and stay true to yourself.