Essential Guidelines for

Navigating Cryptocurrency

 

Welcome to the first of a series of articles aimed at assisting both novices and seasoned traders in navigating the volatile world of cryptocurrencies. As this financial frontier can be both incredibly rewarding and unpredictably risky, we have developed essential "Rules of Thumb" that should guide everyone in the cryptocurrency landscape.

 

Fundamental Guidelines:

• Anything is Possible: Prepare for Volatility
• Not Your Keys, Not Your Crypto: Custody Matters
• Verify, Don’t Trust: Due Diligence is Key
• Educate Yourself: Never Stop Learning
• Only Invest What You Can Afford to Lose: Risk Management
• Accountability Lies With You: Own Your Decisions

 

A Deeper Dive

Anything is Possible:

Cryptocurrency markets are notoriously volatile, with sudden highs and lows. A prime example is the March 2022 upheaval of Terra, a widely popular project, due to an exploit found by malicious actors. This incident is a stark reminder that, regardless of the project's reputation or perceived stability, there is always a potential flaw that can cause its downfall.

Not Your Keys, Not Your Crypto:

Assets stored in centralized institutions, such as banks or exchanges like Coinbase, are under their control. These entities can freeze or seize assets as they deem fit. To retain control over your assets, opt for decentralized, non-custodial wallets like Blockwallet or Trezor Model T. Such wallets do not require identity verification (KYC), but necessitate safeguarding a collection of words (key) that grant access to the wallet, and depending on the type of wallet, 2FA can be enabled for elevated personal security of your digital assets (crypto).

Verify, Don’t Trust:

Always perform due diligence before making investment decisions or accepting claims made by crypto projects. Many content providers and influencers exploit the ignorance of others for personal gain. Additionally, crypto projects often fall short in their whitepapers, sometimes even resorting to falsehoods. Always seek verification for any claims made, and if none can be found, consider that a red flag.

Educate Yourself:

Knowledge is power in the crypto world. It is crucial to continuously educate oneself on trading strategies, fundamental research, and on-chain data analysis. We recommend seeking educational material from multiple sources to avoid misinformation. If you are struggling to find reliable resources, contact us for recommendations.

Only Invest What You Can Afford to Lose:

Financial risk in cryptocurrency should only involve disposable income, i.e., the funds remaining after covering all essential expenses. Cryptocurrency is not a 'get rich quick' scheme; it is a high-risk, volatile market. If you don't have disposable income, it is advisable to avoid the market until your financial situation improves.

Accountability Lies With You:

Ultimately, you are responsible for your investment decisions, whether they result in gains or losses. It is easy to blame others for bad advice or decisions, but self-analysis of mistakes is crucial for growth as a trader or investor.

Thank you for reading Part One of our “Crypto Guide for Beginners”. Part Two will cover crypto terminology and acronyms, so stay tuned. We highly value your feedback, so please share your thoughts here.

Disclaimer

The information in the "Crypto Beginners Guide" is for educational purposes only and is not intended as financial or investment advice. Cryptocurrency investments are volatile and high-risk. Consult a qualified financial advisor or do your own research before making any investment decisions. The authors, contributors, and the platform are not liable for any losses incurred due to the use of the information provided. Use the information in this guide at your own risk.

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