Several years back, I was approached by friends to join a multi-level marketing (MLM) platform that traded cryptocurrencies. As someone unfamiliar with cryptocurrencies, it took months of explanations before I understood how these investments worked.

Eventually, I decided to invest in Procurrency, a cryptocurrency platform that operated as an MLM. It proved to be a costly mistake. Purchasing cryptocurrency through an MLM means paying an inflated price and puts you at risk of the cryptocurrency and the company vanishing.

Many organizers are only after your money. I was later approached with another MLM offer promoting KaratBar Coin, which my city was buzzing about at the time, but now no one mentions it.

In 2019, the company was ordered to cease promoting the cryptocurrency due to allegations of it being a scam. Investors lost over $100 million.

Investing

Investing in cryptocurrencies can be overwhelming, especially with over 22,567 cryptocurrencies listed on CoinMarket Cap. It's important to do your research and invest in the top 100 cryptocurrencies, as many of the lesser-known options are created solely to benefit their creators.

With so many options, it's easy to fall for a fake or scam currency, which is why it's important to carefully evaluate each investment opportunity before committing your money. By investing in reputable cryptocurrencies, you can reduce your risk and increase your chances of seeing a return on your investment.

Altcoins can't be bitcoin

A common misconception among investors is that an altcoin, any cryptocurrency that is not Bitcoin (BTC), will eventually reach the same price as Bitcoin. At the time of writing, Bitcoin is valued at $24,754 and had reached a high of $68,789 in 2021.

One significant factor that sets Bitcoin apart from other cryptocurrencies is its maximum limit of 21 million coins that will ever exist. In contrast, many altcoins have billions or even trillions of coins available, which makes it unreasonable to compare their demand and supply with Bitcoin.

Buy your cryptocurrency on an exchange

Numerous cryptocurrency exchanges exist and can be likened to banks for fiat currency. However, unlike traditional banks, exchanges are virtual and cannot be visited in person.

An exchange enables you to buy and sell cryptocurrencies similar to how you conduct online banking transactions. While many exchanges are available, only a handful are considered reliable and trustworthy. The larger the exchange, the more likely the company is to endure market turbulence and not lose your investment. In essence, big and small exchanges are comparable to big and small banks.

Nonetheless, last year, the FTX exchange encountered trouble when its founder and key personnel used investors' funds for personal gain. Although the crypto market is not 100% regulated like traditional banks, scams can still occur even among top companies. Therefore, investors must conduct due diligence before investing in an exchange, and even then, there is still a possibility that the company could experience financial difficulties.

The best exchanges today

The two leading cryptocurrency exchanges in terms of trading volume are Binance followed by Coinbase.

Binance is a Chinese-based cryptocurrency exchange that has a vast range of digital assets. The company was established in 2017 by Changpeng Zhao and he strives to keep the platform transparent by sharing the latest news about the company.

The largest United States-based cryptocurrency exchange is Coinbase, founded by Brian Armstrong in 2012. Coinbase has become the first cryptocurrency exchange to go public by being listed on the New York Stock Exchange.

Another cryptocurrency exchange that I have used personally is KuCoin. This Hong Kong-based platform was founded by Michael Gan in 2017.

While there are other exchanges available, I only keep my cryptocurrencies on a few exchanges that I trust.

As you become more familiar with cryptocurrencies, you will realize that transferring your digital assets from an exchange to your personal wallet can be complicated.

A personal wallet is a safe place where you keep your private keys to access your investments. Your investment cannot be accessed by anyone else, including the cryptocurrency exchange. You are the only one who has the information to access the account.

Since cryptocurrencies are not regulated like traditional banking institutions, your investments are at risk if a company gets hacked. There have been many hacking incidents, and in most cases, you may lose your investments. Although some companies have covered the losses, few companies offer this type of protection.

Hopefully, it helps you,.

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Disclaimer: This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.

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