In the last decade, the crypto gospel has spread like wildfire and its evolution continues to change the face of finance as we know it. But even with its recent integration as an authentic method of investment, cryptocurrency remains a crazy jungle with enough pitfalls to deter newbie crypto investors who are more prone to mistakes as they navigate the industry.
These mistakes, which happen through carelessness on the part of individuals or projects, often result in money being stolen or lost, whether in part or in full. Not a lot of new crypto investors go into the industry with adequate knowledge of actions that could get them on the wrong side of the market and the crypto space in general.
So in this article, I'm going to tell you 5 things that could get you scammed in no time.
- Using Hot Wallets
In cryptocurrency, users have the option of a hot wallet and a cold wallet which come with their private key. What makes a wallet hot is its quality of being linked to the blockchain and always being online. While these features make for easy transactions at a swift rate, they also make wallets prone to compromise. It's advisable to never keep the money you can't comfortably lose in a hot wallet.
On the other hand, cold wallets are actual devices that help you store all your gems online and stay linked to the blockchain through your private key.
- Revealing Your Seed Phrase
This is one of the easiest ways to get scammed. In the same way, real-life streets are littered with shady folks in back alleys, the crypto space is rife with scammers and hackers who wouldn't think twice about cleaning out your wallets. And even the savviest crypto experts have fallen prey.
Revealing your seed phrase to another party rarely ends well; and this includes filling out your seed phrase on a site you feel is safe or clicking links from Twitter, Telegram, or Discord DMs.
Another way to get compromised is to leave your crypto on an exchange you don't plan to trade actively on. All hackers need is your password and they're in.
Paying Excessively For Gas Fees
If you're new to crypto and you're reading this, gas fees are incurred for rewarding crypto miners who provide the computational power that allows executed transactions on any blockchain to be verified. This simply becomes a nightmare when there's a high volume of network activity at the time of a transaction.
While some NFT Mints and trades are time-bound, transacting when gas fees are super high puts you at a loss as you are merely burning good funds for basic transactions.
- Making Mistakes When Sending Cryptocurrency
I think after revealing your seed phrase to malicious parties, sending your crypto to the wrong address is the second most easy, careless mistake to make. Wallet addresses are made up of a series of numbers and letters, usually 20 to 42 characters in total.
Typing out characters one by one or sending money without cross-checking the address multiple times will have you compromising yourself even without an external party.
- Letting Your Emotions Rule You
When most people get into crypto for the first time, the excitement of making money quickly tends to cloud their judgment and they soon find themselves in a bind. Investing because you heard someone else's success story is a sure way to lose or get scammed if you don't do your research first.
In cryptocurrency, there's FOMO (Fear of Missing Out) and FUD (Fear, Uncertainty, and Doubt) When you get caught up in the fear of missing out because you see other folks getting rich, it's easy to let those emotions get the best of you and have you taking a wrong decision.
It's pretty much the same thing with FUD. Paying too much attention to other people's negative assessments may have you getting influenced and losing out on opportunities that could have brought about juicy returns.
Conclusion
In cryptocurrency, it may not be possible to predict every single thing due to the volatility of markets, but there are tried and tested principles that would not only keep you secure but help you enjoy your crypto journey.
You've just read five of them and there's more to learn. Lastly, don't invest more than you can stand to lose. Always take profits, learn when to curb your greed and you'll do just fine.
