How To's

How To Invest In Cryptocurrency Safely

Are you nervous about investing in Cryptocurrency and adding coins to your portfolio? Here’s how to minimize the risk.

1. ONLY INVEST WHAT YOU CAN AFFORD TO LOSE

Cryptocurrencies are extremely volatile and speculative. Any investment of capital should only be done after a person has done his/her own thorough research and is completely satisfied as to the viability and safety of such an investment. The Internet is chock full of unsound and unsafe investment advice. Always consult with your personal financial advisor and never invest in anything without first considering the risks and potential rewards.

2. DO NOT INVEST IN CRYPTOCURRENCIES BECAUSE THEIR PROMOTERS CLAIM TO HAVE SOME SPECIAL CONNECTION TO SOMEONE WHO IS SUPPOSEDLY “IN THE KNOW”.

If you are looking for an easy way to make money, this is not the route you should take. Promoters with a direct connection to someone who is really “in the know” can often offer sound advice that is not available from other sources. However, most people who claim to have insider knowledge do not have a clue and should be avoided at all costs.

3. A SAFE & RELIABLE EXCHANGE.

Look for a site with a “featured trustmark” from TRUSTe or PCI compliant. These are independent 3rd party organizations that put a stamp of approval on websites they have examined and determined to be secure and trustworthy.

4. FEES.

Make sure the fees you pay to buy your cryptocurrency with a credit card are reasonable and clearly disclosed up-front. Don’t fall for the “hidden charges” that sneak up on you later. Ask about fees before you sign up and make sure there are no extra “activation” or “withdrawal” fees.

5. DO NOT INVEST IN ANYTHING BASED ON PROMISES

Do not invest in anything based on the promises of somebody who has sent you an e-mail or made an audio/videotape telling you about how he/she has made lots of money by investing in cryptocurrencies. This person will either be a scammer who is trying to steal your money or is simply a stupid fool who has put all his/her eggs in one basket. Follow the “e-mail scams” to a T and NEVER put any faith whatsoever in anything anyone says to you in an e-mail unless that person has given you his/her telephone number and real face-to-face contact information.

6. ONLINE EXCHANGES

Do NOT buy cryptocurrencies from online exchanges! Many of these exchanges have been hacked and the perpetrators have made millions of dollars worth of Bitcoins disappear. In fact, since Mt. Gox declared bankruptcy in February 2014, at least 751,408 BTC (that’s right, seven hundred and fifty-one thousand four hundred eighty-eight thousand, nothing but twos) worth of Bitcoins have simply evaporated into thin air. Online exchanges are NOT safe places to invest your money.

7. COIN SHOPS

Do NOT buy from coin shops or shady private individuals either!

8. INDEPENDENT RESEARCH

Always do your own independent research and don’t depend on what other people tell you.

9. RESEARCH THE COMPANIES

Research the companies behind the cryptocurrencies you’re thinking about investing in.

10. EXAMINE THE BLOCKCHAIN

Examine the blockchain to which the cryptocurrency is attached. Make sure it has a robust, well-developed and widely accepted underlying technology. Look at the size of the network and how quickly it is growing. Blockchain technology is evolving at a breakneck pace and more and more cryptocurrencies are being created every day that have no real value whatsoever other than as an investment vehicle. Are the developers and maintainers of the blockchain active and responsive to user questions and feedback?

11. WELL-ESTABLISHED AND RELIABLE BRANDS.

Look for cryptocurrencies that are based on well-established and reliable brands. There are many “cryptocurrency” projects that are nothing but a concept or paper prototype created by a few people who have no clue whatsoever about how to create a successful business. If you invest in one of those projects, you could lose everything you invest.

Look for projects that have been tested over time with millions of actual transactions. The best way to find out if a project is legitimate is to examine the team behind it. Who are they? How long have they been in business? Do they have any track record at all in developing profitable projects? Look for teams with deep domain expertise combined with proven records of creating successful businesses. If a team has credibility, it will be reflected in the cryptocurrency they have created. Look for cryptos that have been traded on reputable exchanges with a high volume of transactions.

 

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About the author

Mizzy

Mizzy

Muwafaq Lee, professionally known as Mizzy is a Ghanaian blogger from Zujung, Tamale. His work has been recognized by Millions of people around the world. His Goal is to inform and educate people worldwide on topics like, How to grow a successful business online, Search Engine Optimization (SEO), Web Development and many more. He loves to Educate people to attain their financial freedom online. Reach out to him personally on [email protected] for your business consultations, website designs, search engine optimization (SEO) services and digital marketing. +233 544 196 596

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