5 Rules of Thumb before Investing in Cryptocurrency.

There’s always that rush of adrenalin when you hear of someone else’s win in the Crypto space, and you just can’t wait to experience yours. You get excited and boom, you are in - expecting to start making some money. Well, as usual, every investment has its level of risks; low risk, medium risk, high risk, and the risk that can send you to the great beyond. However, what you may not know is that there are certain risks that can be totally avoided if you follow these 5 Rules of Thumb. They are so easy to follow and they will save you a lot of 'Had I Known' - a tale of regret.

1. Learn about Blockchain & Cryptocurrency: Before you decide to invest in any coin/token/project, make sure you already understand the basics - Blockchain is not Cryptocurrency and vice versa. Blockchain is a record-keeping system and as such Cryptocurrencies leverages on this decentralized platform to execute their projects. In your learnings, you would also discover that Bitcoin is a Cryptocurrency, just like Ethereum, Litecoin, and other tokens/coins, while Bitcoin Cash also exists. You will be amazed by your discovery.
2. Don’t Invest more than you can afford to lose: As a newbie, this is a rule of thumb you should follow to the teeth. In as much as you are excited to the roof, you will need to come down and budget your expenses. Just like every investment channel, you have to ask yourself this question: If I invest this amount of money and things don’t go as planned, what will happen? Can I overlook it? While investing with valid and reputable cryptocurrencies comes with high rewards, it also comes with risks and you need to be sure it’s a risk worth taking.
3. Research the coin/project you want to invest in: Now, this is a little bit dicey as I have seen individuals put in their hard-earned money into projects just because it was recommended. I would like to reiterate that recommendations won’t be enough, you would also need to do your homework. Go through the whitepaper, study their pattern, check if they have a place in the competitive market because you may just be putting money into a pump and dump project, and believe me, that sucks. Get a clearer idea of the planned project and its capabilities.
4. Use Reputable Exchanges: Now, the majority of the things you need are set, what is next? Trading. The fourth rule of thumb says that you verify the authenticity of the platform you would use in exchanging your money for the coin, you don’t just jump on any exchange. The second part of this is that you confirm receipt of coins in your wallet and ensure it’s not an altcoin. This is because at this stage, you are dealing with humans.
5. Never share your private key: Your coins are sitting nicely in your wallet and for whatever reason, someone comes to you and explains there’s a technical difficulty somewhere somehow and they will need access via your private key, please decline such help. Or the one that gets you excited - you get an extra Bitcoin when you fill out a form and a field in this form requires your wallet address and its private key. At this stage, you speak to your fingers and close the tab to the form.

In my next post, I will further explain the role of the Private Key to your wallet.

All that is listed above isn't enough to get you started on investing in any Cryptocurrency but it should guide you towards making better decisions.