Technology has come a long way since the beginning of the 21st century – from advanced computers and gaming devices to digital phones and tablets. And now the current generation has seen the introduction of a new form of trading — cryptocurrency! Rivaling physical money as well as the traditional debit and credit cards, this new digital currency is proving to be a force to be reckoned with.
Popular examples include the Bitcoin, Litecoin, Ethereum, IOTA, Dash, Ripple, Stellar, and Cardano, among others. If you are interested in joining this new internet craze, read on to discover how to invest safely in cryptocurrency.
Selecting an Exchange
It’s important to consider “where” you will start trading cryptocurrencies. You can’t just use the first exchange that pops up on Google — that’s how fortunes are lost. There are a myriad of options and unlike traditional brokerages, cryptocurrency exchanges are, by and large, run by people who range from seasoned entrepreneurs to amateurs coding platforms on their spare time.
The first thing you will likely need to consider is whether the exchange you are planning to use can fit your trading needs. Those needs will generally be limited to safely receiving a bank wire or crypto coin deposit, quickly making funds available to your account, and finally, allowing you to quickly withdraw those funds to your paper wallet or bank account. You must choose a candidate exchange where you would like to start trading, and do some research on it.
This step may seem straightforward but it is really not. You have to keep in mind that whatever exchange you choose to investigate, you will likely see a large number of results. Crypto is much like the Wild West right now, and as such, exchanges or individuals may, for several reasons, competitive or
Otherwise, run campaigns of disinformation on each other, flooding the internet with fake complaints. That is not to say there won’t be a myriad of real complaints, you just have to be able to tell the difference.
Another good way to gauge the reliability of an exchange, is to ask. Well-designed coins tend to have their own, coin specific forums open to anyone. You can always ask “Is Mary’s Exchange reliable?” You should get an answer anywhere from a few minutes to a few hours later, and these are valuable responses from people with a vested interest in you having a good experience as you begin to join their community.
Another good source of information on an exchanges reliability is the infamously named “Troll Box”. Contemporary exchanges tend to have a chatroom on their pages (the “Troll Box’) where users can lounge and trade information.
It is hard to take trading information seriously in a troll box, as half the point (and fun) is to practice disinformation, to your benefit; But if you ask a question about deposit and withdrawal
Times, members (not moderators) will likely give you a straight answer.
3 Key Concepts to Consider When Trading Cryptocurrency
Trolls are the bane of the internet, and crypto is no exception; And things can sometimes get heated, and sometimes, they get out of hand. It is very likely that certain altcoins have professional trolls on retainer who attack any and all other altcoins which may have a chance of upsetting that of their patron, in concerted, 24 hour, 7 day a week, sessions of spreading Fear, Uncertainty and Doubt (FUD) within the community.
Trolls are agents of disinformation and master provocateurs, they will often conduct false flag operations pretending be victims of a given developers “scam” and at times appearing to blend into a community to destroy it from within.
The effect of trolls on cryptocurrency in general is measurable and quite strong. Your job as a savvy investor is to be able to separate the legitimate information about a coin you are researching (complaints, etc.) from the white noise delivered by trolls.
Sometimes a developer will offer a “floor” pricing for their coin, a price at which they will always gladly take all comers and reimburse them a fixed amount per unit, guaranteed.
This was one of the main selling tools used in the Paycoin fiasco. It is extremely important for you to stay away from any coin or developer who offers a guaranteed buy back price for their coin.
This is unequivocally a scam, most likely a Ponzi scheme. It is impossible for anyone, either in the real world or in crypto, to guarantee the price of a security for the simple reason that stuff happens and markets are unpredictable.
If there were a guaranteed way to prop up currencies or securities, we would not have the stock market boom and bust cycle that hits us every Ten years or the credit crunches sovereign nations get into periodically.
Another way to mask this scam is to frame it in terms of a security, where your price today will be “X” but your buyback price “Z” days from now will be “$X+$Y”, this can also be framed as “$X+Y%”.
The addition of a liquidation date implies that the money will be “invested” and that the lender will receive a “share” as interest for the loan.
Do not fall for it, particularly in cryptocurrency at this stage. These securities are not worth the paper they are printed on, yet these schemes pop up periodically and people still fall for them.
It is important for you to be aware of and execute good practices when dealing with cryptocurrency. A developer should always sign releases with his PGP key. You can then verify the software you are downloading using his Public Key, the wallet.zip and the PGP signature.
The process is pretty straight forward and you should be able to get a handle on it pretty quickly if you are not already familiar with PGP.
The reason this is so important is to be sure that the wallet file you are downloading has not been intercepted and/or replaced by a third party. When dealing with cryptocurrency, you are dealing with money. If a clever hacker is able to penetrate your developer’s server, it is trivial for him to replace the wallet download with his own version, designed to send him all your coins once you decrypt your wallet.
One of the innovations you should be on the lookout for are wallets (or whatever replaces them), that make the cryptocurrency trading experience both more transparent and more secure for the average internet user. There have long been discussions in this vein but crypto is as complicated and hard to secure as ever. A disruptive technology in this space is something to watch for.
As an important side note, you should always use whatever tools your coins developer has provided to help you secure your coins. In most cases, this will include wallet encryption. Set a strong password, write it down somewhere safe, and never share it with anyone.