During the pandemic, people from all age groups are trying to find alternate sources of income. Cryptocurrency market seems eye-catching to new age investors and the youth of our country as often they love to play a high risk and high return game in terms of crypto. Today, we will discuss some of the safety tips, which you should keep in mind while making investments in digital tokens.
To begin with, if you invest in stocks, or equity funds you will know that there are risks associated with any type of investment. The digital token industry is not an exception. If you are planning to buy a specific coin then you must be fully aware of what is the project you are putting your money on. This brings us to our first suggestion.
Never invest in something about which you have zero knowledge.
People often fall in this type of trap while investing in cryptocurrency. Often they fall for some scheme or project which promises to be the next bitcoin or says they are sure to give double or triple return on your investment. These shady projects have no idea what their project is about and simply they keep building a pyramid scheme. These type of scams are easy to detect and you must not invest in any of these.
Also, if you are a new investor, then you need to do your own research before buying Altcoins. Doing research is quite important while investing in any asset whether it’s digital or physical. If you are interested in investing on any specific project, search the internet for related resources. You can ask the crypto community as well for relevant information. Before buying any coin, make sure that you go through the white-paper of the project. White-Paper is generally prepared by the company explaining the basics of that particular project. You can find in there the applications and utility of that specific token and if you believe that it has practical applications in the market then you might invest in that coin.
Get a Trusted Exchange for Buying.
If you want to invest in cryptocurrency, then you need to get a good and reputable platform to perform your aim. An Exchange acts as a platform for you to complete the transaction. Typically, they charge a trading fee close to 0.2% to 0.4% on your transaction.
Always check what type of payment options they are providing, how is their customer support, who owns the company and what is their future vision. I would recommend you personally WazirX India to trade cryptocurrency in India. It’s really easy to deposit your money from bank into their wallet. You can deposit INR by NEFT, IMPS, UPI or RTGS 365 days a year. They have been acquired by Binance which is the largest cryptocurrency trading platform in the entire world. Also, they aim to make their exchange decentralised in future. You can also withdraw your money anytime by NEFT or IMPS. They charge a 0.1% trading fee for the 1st year if you pay using WRX token a coin made by WazirX.
You will find that some of the non reputed exchanges keep coming up in the headlines for either stealing the money of people by abruptly shutting down or they get hacked either. So choosing an exchange is quite important.
Keep your account secure.
Users get hacked quite often and they loose their digital tokens. Today let’s discuss some of the steps to stay safe while investing in cryptocurrency.
- Never use the same email id for your work/personal mail to buy or sell crypto. Don’t make an account with the same mail for storing digital assets. It’s always recommended to make a separate email id to make an account for exchanges.
- Store your private key safely if you store your funds in a separate wallet. Exposing it in public may lead to loosing your entire wallet assets. Never share it with anyone. If you store your funds in centralised exchanges then you need not worry about it.
- Use 2-Factor Authentication for login to your account. Even if the server is compromised or your password is leaked, hacker’s would find it really difficult to login to your account.
- It’s recommended to use an app like Google Authenticator to setup 2-Factor Authentication. SIM card based OTP’s can get compromised by cloning.
- Use Hardware Wallets if you have a large reserve of funds invested in crypto. It’s only applicable to people with huge money in assets. Hot wallets are for normal investors which are convenient to online trading but are more prone to get hacked.
These were some of the basics for investment in cryptocurrency. If you want more information, you can dm me on Twitter (@99promitsaha) /Telegram (@promitsaha) anytime. I will help you out.