I Earned Crypto From Coinbase And Made Five Expensive Mistakes
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I Earned Crypto From Coinbase And Made Five Expensive Mistakes

By BenjaminV | derkryptograf | 14 Aug 2020


I admit cryptocurrencies and DeFi are very new to me. I earned my first tokens on Coinbase. It felt great. After a couple of days I got addicted and greedy. I lost some money. I made some bad decisions you should not repeat, if you don't want to be sad loosing a lot of money. 

Start earning on Coinbase

Coinbase is a perfect platform to earn and hold cryptocurrencies. For example you can earn COMP, STELLAR LUMENS, EOS and KYBER tokens for free. All you need to do is sign in https://coinbase.com/earn/xlm/invite/dyq87w9f

(for KYBER) or EOS

https://coinbase.com/earn/eos/invite/bj4wcgms

Then you watch short introducting Videos about a cryptocurrency like EOS. After each video you have to answer easy questions. Make sure you watch the video. It just takes about two minutes. In the end you can be rewarded with crypto worth of 8,49 Euro. After a couple of days I had 36,83 Euro in my Coinbase portfolio. 

Mistake number one: Don't be greedy

But what to do with EOS, KYBER, COMP and STELLAR LUMENS? I read about how you can earn COMP on Compound.Finance and also earn interest on crypto like DAI or USDT and USDC when you supply these on Compound. The interest rates seem quite attractive, especially for DAI (in the last days it differed between 2,9 and 4,2 %) and USDT with 17-18 %. This made me greedy. I thought, it is a good idea to supply DAI on Compound to earn more COMP and earn interest. I got greedy. Being greedy leads to bad and uninformed decisions. 

Mistake number two: Don't knowing crypto 

If you look at Investor legend Warren Buffett, you can learn one of the most essential lessons in finance:

Don't invest in something you don't understand.

Basically, it is the same with cryptocurrencies and DeFi. You need to know what to do, otherwise your decisions can be very expensive. Other than that there is no guarantee whatsoever that your investment decisions with crypto are right or that they will pan out in the future. If you are a risk averse Person you probably should not bis cryptocurrencies, because the market is very volatile. 

Nevertheless I converted my KYBER and my EOS, COMP and STELLAR LUMENS to DAI and ETH and transfered these on my Metamask wallet. I connected the wallet with Compound Finance and wanted to enable my DAI and supply it. 

Mistake number three: Underestimate transaction costs

Here I made my most painful mistakes. I wanted. Everytime you want to enable cryptocurrency like DAI on Compound you have to pay a transaction fee for the underlying smart contract. The same is the case when you want to supply your funds. Now, i could not enable and supply because it showed insufficient funds of ETH currency for the gas fee. I needed about 23 Euro to enable and 55 Euro to confirm supplying DAI. That was the most painful lesson. In the end I had to transfer extra money from my bank account into my Metamask wallet. Now I payed almost more than ten times more than the amount I'm lending. That is really painful and not what I expected. I could have spent the money in a lot of better ways...

Mistake number four: Not to hodl 

This most painful rookie experience brought me to the most important lesson: Start to hodl. Better invest in a cryptocurrency with a good market capitalization. Furthermore the coin should be more than a currency. The DeFi project as a whole should be useful and have potential in real life. I believe there are only a few coins which meet the criteria of quality. I would hodl ETH, COMP, XRP, LINK, and of course BTC. For diversification I would hodl USDC, DAI and USDT.

Mistake number five: Impatience

But I'm not quite there, yet. First, I have like to really earn some crypto like here on publish0x.com. 

Earning and hodling, not buying so much. That is my new strategy now. I have the feeling that it will be a marathon. I will need patience. On the other hand, impatience and fear of missing out are bad drivers. These emotions lead to uninformed and unnecessary risky decisions.

Check out my blog

https://www.publish0x.com/derkryptograf

 


BenjaminV
BenjaminV

I'm a journalist who mostly writes articles related to security policy. Blockchain, Cryptocurrency and Decentralized Finance are very new to me. I'm motivated to learn more about it.


derkryptograf
derkryptograf

Hi, Cryptocurrencies, Blockchain and DeFi are very new topics for me. I'm trying to learn more about it. I'm trying to learn more about Distributed Ledger Technology and how it can change our real life.

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