New to Cryptocurrencies?
This article was written by Isonex Capital for newcomers to digital currencies!!
In less than a decade cryptocurrencies have grown from a countercultural curiosity to a multi billion dollar industry. With such a meteoric rise came stories of the incredible money made by early investors. Understandably we all want a piece of the action, as for many this could be the opportunity of a lifetime. But for newcomers, entering this emerging market can be extremely bewildering and that’s assuming you are tech savvy.
To begin with, there are currently close to two thousand cryptocurrencies on the market, leading to the dilemma of picking the winners from the non starters. Not an easy task in any market, even for professional fund managers. Then there is the issue of finding an exchange with a good reputation for both security and customer assistance, as well as the ability for buying in with your local currency. Once you have completed these first steps and now own cryptocurrencies you will need somewhere safe to store them. It is not advisable to leave them on exchange, as you alone should be in control of them. This leads us to one of the most important items in this article and that is the question of security.
One of the fundamentals within the crypto space is security and wallets, hot wallets, cold wallets, web, paper, mobile, software and hardware wallets ? what does it all mean ? its enough to make your head spin. Consider the fact that if you are buying into cryptocurrencies, you will be taking your hard earned cash from your traditional bank and throwing it up onto the blockchain, where if anyone hacked your wallet, or you lost your private key, your digital assets are gone, with an almost zero chance of recovery. With this knowledge you may begin to realize the importance of your own research and diligence.
With the mainstream media constantly reporting the “DEATH OF BITCOIN” along with “THE CRYPTO BUBBLE HAS BURST” shocking stuff hey ? Often followed up with a report on the dwindling market cap which would seem to confirm this. However dig a little deeper and you’ll find that the largest international financial institutions are currntly creating cryptocurrency trading platforms and exchanges with secure custodial storage. Such proactive movements by industry leaders would seem to debunk the rhetoric of the moment. This goes to show that following the mainstream media can be bad for your wealth.
This is a lot to take in for many investors, particularly when we factor in the endless amount of conflicting online information. So it is essential to research any cryptocurrencies you are considering investing in. Do your own homework and listen to both sides of the argument before making an informed choice. There is a lot of worthwhile information available, with many bloggers and other observers who are there to help people entering this market. Not only to make money themselves, but also to promote the use case of Cryptocurrencies and enrich the community as a whole.
Below, we have listed a few pointers to be aware of for anyone new to the crypto sphere. If you are planning on managing your own investments and making your own trading decisions, then you should also learn how prices are set, and how to determine quotes, bid and ask prices and orders. It is important to understand how to use trailing stops to protect profits and to avoid losing all your gains.
This is the subject of a forthcoming article by Isonex, How cryptocurrency exchanges work.
So let’s get into some key points to consider when entering the world of cryptocurrencies.
- Research: Doing your own research is critical before investing in anything. Bitcoin is the big name in the crypto world but there are many other coins and tokens emerging that have real utility and strong business models. A good place to begin your research on a crypto project is the team. Who are they and what are their backgrounds. Research the technology, Does it claim to solve a problem ? How is the technology distinctive and relevant ? Has the team met their roadmap objectives ?
- Strategy: Say you bought a particular coin at an attractive price and it’s made you good returns, what’s your next move ? Are you a trader or a Hodler ? Most newcomers haven’t determined points at which they take profits, instead they hold, risking all the gains they’ve made. This plan may work out if you are a long-term investor (Hodler), but if you are trading, you need to have a point at which you sell off for some profits. You may see prices continously going higher, that’s to be expected. A good strategy, however, is to sell off in stages and not all at once. This way, you make some profits instantly and still benefit if the price goes even higher. Stop losses can help to ensure you don’t miss your mark. Downturns in the market present excellent opportunities to cost average your total investment.
- Security: Private and public keys present unique security concerns. The public key is visible to anyone, and must be shared in order for transactions to occur. The public key is mathematically related to your private key. You should never share your private key with anyone. If anyone gets access to the private key of your wallet they could transfer your cryptocurrency to their wallet. Your cryptos would be lost and you have no chance to recover them. So keep it safe. If you either lose or forget it your crypto’s will be lost forever. We recommended you use a hardware wallet, they offer high levels of security as they remain offline ( what is known as cold storage). Remember, it is solely your responsibility to take appropriate measures to protect your digital assets at all times.
- Exchanges: Just as the number of Altcoins on the market has grown exponentially, so has the number of exchanges to trade cryptocurrencies on. Most exchanges offer different facilities and policies. Some have lost investors money by not honoring withdrawals or not becoming accessible at a crucial time. Customer support can also become an issue so look for customer feedback before signing up. Begin your crypto trading with long established well respected exchanges that support a wide range of established coins. Raise your verification tier asap, to allow higher trade limits and importantly, larger cash outs in fiat. When sending larger volumes, send a small test amount. Always double check the address is correct and make sure any website is verified before inputting any information.
- 2FA : This is a simple method to enhance the security of your wallet, 2FA represents an independent authentication channel. After entering your username and password when you are accessing your exchange, 2FA requires you to enter a random password that is sent to your smartphone to complete the login process. This dramatically improves your security because it requires an additional level of authentication via your smartphone before your username is verified.
- Diversify : A diversified investing strategy means investing in different industry changing technologies. Invest in different coins with the best potential in each sector and keep track of what is happening within each market that the project is looking to disrupt. for example, Bitcoin and Litecoin as a store of value, Ethereum and Stellar for smart contracts, Monero for privacy, and Ripple for banking. This is a smart way to spread your investment across different technologies that have a high chance of success. Do not just follow the market price but also the technology behind the project as that could help determine the long term returns.
- Emotions: It’s all too easy to get carried away by greed, nerves, hope or excitement in investing. Different situations will bring different emotions but you must remain in control and logical. When you are on a winning streak you might feel invincible and make trades against all reason. Before entering a trade, it always helps to ask yourself the reasons behind the actions that you’re about to take. Rather than letting the fear of losing, greed, failure and stress overwhelm you, use them as learning experiences to become a smarter trader.
Many of you will have few problems adapting to the rules of the game and will go on to make substantial returns within the cryptocurrency market. But for those of you with neither the time or technological knowledge, index investing is a way to play the market without any of the costs or risks ordinarily associated with investment markets. Index investing is the fastest growing segment of the investment industry and for good reason. It is a low cost, low risk investment strategy that enables “know nothing” investors to diversify their investment, thereby holding a large market share that offers above average long term returns.
The above points are written as a basic guide for any of you that are new to cryptocurrencies. We hope it helps you to understand that without exercising diligence in security, your digital assets will be at risk of theft or loss. We believe that this emerging market will grow exponentially within the next few years. The technology that some cryptocurrency projects are developing is truly world changing and will open up new possibilities for all of us through business, healthcare, education and investment, to name just a few. With this development that has caught the attention of governments and financial institutions globally, there is serious money to be made, but also serious losses if not played judiciously.
**Isonex Capital is dedicated to the growth of digital currencies within the global marketplace and in facilitating investment into the blockchain ecosystem. We strongly believe in investor protection through security and transparency. We are committed to helping newcomers gain an understanding of the risks involved in this new asset class. If you would like to find out more about us, visithttps://isonex.io