Typically I write fairly technical articles, this is my first post in a new blog aiming to build piece-by-piece a basic guide to getting started in crypto. I assume no prior knowledge.
Today's post will introduce a few golden rules, that if observed will protect against losing your money or falling victim to scams, I also discuss the reasons for these rules.
Don't worry if you don't know what some of the words mean in this guide, I will compile a glossary in my next article, but it important you absorb these rules even if they do not make complete sense, yet.
You may develop further rules or disagree with mine, if so I would love to hear about it in the comments.
- Never talk to people about your crypto investments, if things go to plan you will be rich, you don't want to make yourself a target of theft. Don't brag down the pub, don't tell people at work, don't constantly check prices in front of others. Sure you might talk to close friends and family, but take care, only share details with people you absolute trust, even then be coy and don't reveal details if possible.
—It is a sad truth that a common way people are deprived of their assets is through people they know gaining access to a passphrase.
- Store your passphrase safely, in a physical form, keep a copy in another safe location. Never create a digital copy of your passphrases. Don't even read it aloud.
—I have helped many people try to understand how their assets were stolen, most the time they had made the mistake of storing their passprase on quick note, one note, or other similar platforms. Don't think emailing it to yourself or saving it as a draft is safe. Never, ever store your passphrase digitally - ever... EVER.
—It is important to understand passphrases are not just a random collection of words, a hacker can discover your phrase even if you store it in fragments, by recompiling it algorithmically.
- Buy your crypto yourself, do not use a broker, or a scheme, or an investment company.
—New buyers often make the mistake of buying crypto through a third party, at best these people will charge you fees you could avoid paying, at worst they will just steal all your money. If you buy through a third party, there is a good chance you have already become the victim of a scam as soon as you sent your money to them.
- Use a reputable exchange.
—When starting out don't just plump for any old exchange, use a big well known exchange, like Coinbase or Binance. You don't want to send your money to an exchange to find they will never let you withdraw.
- Check fees and rates before you buy.
—those fees may not seem unreasonable, but remember that small fee may be worth thousands in a year. Fees saved today could be a fortune later in your investment life. When sending your fiat to the exchange check different options, it may be cheaper to use a bank transfer than a debit card. Many exchanges offer third party bank transfer services, these usually have horrendous costs involved, take care. Check the withdrawal fees, these vary between exchanges and are sometimes punitive.
—Some exchanges have entry level apps aimed at beginners, like Coinbase and Crypto.com, these products either have higher fees or unfavourable exchange rates. You pay a premium for that simplicity and cosy safe feeling.
—Ensure your chosen exchange allows you to withdraw the token you are buying at the quantity you are intending to purchase, many have minimum withdrawal quantities, and discovering you have to buy another $200 worth of a token to withdraw it is frustrating.
- Don't leave your tokens on the exchange get a wallet.
—Exchanges are tempting targets for hackers and there have been many high profile attacks. When your tokens are on an exchange you don't really possess them. You need a reliable wallet to store your tokens in. A wallet that has a safely stored passphrase.
—Do not dive in to wallets or withdrawing blind, this is another subject that needs care.
- Make a plan, know what you are trying to achieve.
—It is easy to get sucked into panic buying and selling. You should only make crypto purchases that you decided in clear thought to make. Do not buy or sell when tired, stressed, drunk, to chase losses, or because someone told you to on the internet. Stay calm, do research, know what kind of investment your choice represents.
- Do not buy 'meme coins'
—You may have heard of some token called something like 'Baby Elon Shark Safe Moon' that is 'pumping', you need to know that these tokens are ponzi schems (pyramid schemes) a few will get rich, most will lose everything. Your chosen investments should have a use case, an intended purpose. Know that owning 1 billion meaningless token, is not better than owning 0.00001 of a token with purpose.
- Do not gamble
—Investing is not gambling. It might be tempting to get involved in things like leverage trading, but remember with these features you can be left with nothing. If I buy a token that falls in value I still own the token and the right to benefit from future growth. If I apply leverage, I may lose everything. I am amazed how many beginners dive into leverage trading, which is best reserved for experts with knowledge or high risk tolerence.
- Beware of shills
—People shill and mainly they do so for money, most articles—including ones I write—have referral links that earn the author money. Often when writers extol the virtues of a particular coin, it is because they already own it and they want to see it increase in value. While you need to be careful, you also need to recognise that people also promote things they know are good. Take care, double check information people give you before following their links.
Next in the series is-
I will write the following guides shortly-
- Selecting an exchange
- Selecting a wallet and setting it up
- Making transactions
Don't feel like you need to wait for me, but if you do chose to start buying crypto, please research each step carefully before you dive in. One simple mistake, for example when sending your coins to a wallet, could see all your money lost irrevocably.
I write many articles, here and elsewhere, and I often include referral links in my articles. At times I also write unpaid articles about projects I have found that I like the look of. On this particular blog I have made the decision not to include referral links, because my aim is simply to help beginners without them having to wonder about motives.
In my other blog, CryptoPlankton - Adventures in Crypto, also on Publish0x, I publish articles aimed at non-beginners, some of which are more technical or cover ways to earn free crypto - in the interest of transparency these do include referral links.
If you like my articles and you want to thank me for it then please register on Publish0x, then you can tip me, at no cost to you - in fact you can earn crypto yourself just for reading articles.
Remember, while learning involves listening to others I am not a financial advisor so do your own research.