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What to watch out for when investing in Cryptocurrencies
"Liliana Valenzuela" (2019-03-12)
Cryptocurrencies are not without their pitfalls and you will need to be careful when handling your digital currency, to avoid losing everything you own.Before jumping into cryptocurrency, do your research. No one guide will ever be able to cover everything you need to know about all cryptocurrencies and you’ll always be able to find two sides to any argument. Additionally, you will need to understand how to get rich off bitcoin exchanges and wallets work.
Before you make a decision, make sure you’re informed. Read guides, find reviews and test drive with small, disposable amounts of money before Making money off of bitcoin bigger investments.
Stay safe
There is no safety net when working with cryptocurrencies. It’s still largely unregulated and you typically won’t be able to make a police report if your cryptocurrency gets stolen.
The freedom to go beyond the banks and outside of government money comes with a lot of responsibility. Here are a few tips:
Before you send cryptocoins to someone, always double check their wallet address.
Never hand over products or services before the transaction on the blockchain is verified. This might take up to ten minutes on some blockchains.
Always keep the computer on which your wallet is installed safe and clean from viruses and malware.
Never lose your wallet password. You might not be able to get it back and every cryptocoin you own will be lost.
Unpredictable value
Bitcoin and cryptocurrencies in general often suffer from sudden dips in value. Whenever purchasing cryptocoins – or investing in them – always be aware that the value of your holdings can fall. For example, if you buy $1,000 worth of bitcoin one day at $5,871.92/BTC and the price falls to $5,770.54 the next day, your 0.170302 BTC will be worth $982.73 instead of the original $1,000 you paid for it.
Of course this could work in your favor if it goes the other way round instead. However, always be aware that the cryptocurrency market is extremely volatile and past performance is not indicative of future performance.