Over the past decades, the revolution in technology is taking place in almost every aspect of our lives. From using traditional forms of payment such as what took place during the barter trade to currency, notes, and coins, now we have a digital currency that involves technology. A cryptocurrency is a form of digital currency different from the typical type of currency. It does not hinge on a central authority to uphold transactions or generate new units. Cryptocurrency uses cryptography whereby in the currency world, it is a feature that allows only the parties involved in the transaction, that is, the sender and the receiver, to view the details of the trade and, in return, prevent forging. The technology used to support Cryptocurrency is called Blockchain Technology. Blockchain works in a block such that it has blocks of data with information regarding transactions of a particular cryptocurrency. Nowadays, there are a lot of cryptocurrencies, and this is due to the ability to create new currency through the use of smart contracts easily. Due to this, Cryptocurrency forms one of the best ventures to invest your money. Cryptocurrency being one of the best forms of investment, it has customer feedback, where you can get and give information regarding digital currency. As an investor, you can check out the Crypto portfolio to know what mistakes to avoid when starting or investing in crypto. Below are some of the tips an investor should know:
Avoid a bad investment strategy.
People view Cryptocurrency as a risky form of investment, and making a bad trade or having a poor investment strategy can be bad for an investor. While starting to invest, as an investor, you will find social groups that promise tips on how to invest in a particular coin. It would be great to distance yourself from those groups at all costs. The moment you go down that path, it will be hard for you to turn back, and you may lose all the money you have invested. To guide you on how to go about having a sound investment strategy, one should learn more about trading strategically together with an algorithmic approach.
Perform a background check.
As an investor, before investing your money anywhere, and in this case, in Cryptocurrency, you should conduct due diligence to understand and complete information on how crypto works. With this era of technology, information about anything can be found by investors online just by clicking a button. So there is no excuse for an investor to invest without understanding what they are supporting. Whether heavy or light, All Crypto Whitepapers offers the resources you need to learn to know ideal future investments for every type of trade. The important thing is understanding how the coin works and how it makes money.
Use an alternative personal email.
Security is critical while working with Cryptocurrency. For this reason, an investor must have a different email account from the regular one, and the reason for doing this is to reduce data breaches. The other email account should be uniquely only for trading purposes, and it should have a two-factor authenticated password for maximum security. The authentication should be in such a way that it is present in every service you are using while trading, for example, the exchange account. For additional security, also use an application with two factors such as Google authenticator and not text messages. Also, when creating accounts, be sure to use usernames and passwords that are unique and no one else can guess.
Know how to use both cold and hot wallets.
In Cryptocurrency, wallets are for storage. Cold wallet stores the cryptos offline while Hot wallet stores the cryptos online. As a beginner investor, hot wallets are more catching due to easy access. Though convenient to use, hot wallets are at a greater risk of being hacked than cold wallets prepared well. For this reason, it is best that in the cold wallet store crypto, you wish to save for an extended period, and in the hot wallet store, a tiny amount to use daily. Researching different wallet providers is very vital, especially for a beginner investor.
Be careful around mobile phones.
Using your phone to trade and store vast sums of Cryptocurrency is very risky. Mobile phones stand at a very high chance of being stolen physically or being altered electronically. Though it comes with the advantage of being convenient, it should not outdo the importance of security while dealing with trades and keeping assets on mobile phones.
In conclusion, if you intend to invest in cryptocurrencies, the above tips are helpful and what you should know as an investor before investing.