Cryptocurrencies

How to Invest in Crypto: Security Basics for Beginners

If you have decided to invest in crypto, read how to protect yourself from the most common mistakes of beginners and not lose money.

Сhoosing Safe Cryptocurrency to Reduce Risks

When choosing a coin to buy remember that there is no rule on how to find a perfect one that will truly bring you profit. Because of the exchange rate of almost any token can go up and down in a very short period of time. When you a beginner in crypto it is hard to predict these movements. However, there are some rules that will help you to protect your investments.

First of all, it is highly recommended to begin buying cryptocurrency with Bitcoin or Etherum. As it is usually easier to find the buyer if you need quickly sell the tokens. However, you should know that they do not rise in price as quickly as altcoins.

But if you already have some investing experience, and is confident about your abilities, it is recommended to take a closer look at some perspective alcoins. For example, all of the new crypto projects that passed  Bug Bounty Program are checked and safe. Nevertheless, do not hurry to put the whole deposit in the same alcoins, better buy tokens in multiple currencies that will also help to reduce the risks.

Checking the Details

Looking for the coins an crypto exchange, o not pay much attention to over-generous offers. There may be some fantastic stories of earning billions on crypto, BUT! nothing comes for free here. If someone promises you super high profits with minimum investments, think clearly about it.

And here we have a story for you. There was a Chinese crypto service called PlusToken. It promised high profits (10-30% of monthly income) to their holders. And more than 3 million people (not only from China but from all over the world) were tempted to invest in such a lucrious thing. But their hopes was soonely broken, because in the heyday of PlusToken – in spring, 2019 – it was worth $17 billion.

Sure, the first investors got the promised interest, but the rest weren’t so lucky. And the revolutionary platform appeared a simple financial pyramid. Some PlusToken promoters were arrested, but most of the money was liquidated.

But there are also more fraudlent crypto pyramids exist. And their owners sometimes are very creative. Remember the XtraderFX service that was shuted down in UK? Their promotion consisted of fake ads with TV stars and famous financial experts.

Storing Tokens in Cryptocurrency Wallet

Cryptocurrency wallets are used to store tokens. There are hot wallets. Allowing quickly use the funds holded in, they need to be connected to internet. And this makes them vulnerable to hacker attacs.

To increase the security of your wallet, first things first, take care about setting the two-factor authentication. It will help you to protect the wallet from the hacker attacks, as happenned with one crypto investor who lost $70 000 bacause of the hacker.

It will be better if two-factor authentication be done via an app, or SMS. However, the best choice is the app, such as Google Authenticator, for example bacause it will exclude the risk of cloning your SIM card (yep, they make even such a strange things during the attacks).

There are also ‘cold’ wallets. They are more secure as they are a separate entity. Looking like a flash drive or keychain, they may cost between $50 and $200 in the most popular models.

Crypto exchanges propose users warm wallets, but it will be a huge mistake to store all your funds in there. Trading platforms are usually a #1 targets for cyber gangs. It will be wise to put into the warm wallet the amount of funds you will work with in the nearest future and other hold in the cold wallet.

And the last, but not least advice in this article. Save all your passwords and codes that appear when you set up and use your wallet. Bacause for your safety, many wallet creators show them only one time. And if you won’t remember it you have risk to lose the access to your wallet, that means the access to your funds may be lost forever. It is better to write all the important passwords and codes down on a paper. But be careful, don’t allow your dog to find it and chew it up. You also may store your important data in a secure repository, such as a password manager.

Summing everything up, before buying the crypto, check the history of the project, make sure that everything is safe and there is no any suspicious offers. The second thing you should check is the security methods used in exchange platforms you plan to trade.

The third – set two-step authentication in your wallet. And don’t forget to save all your passwords and codes in a safe place.

About the author

Venkatesan Prabu

Wikitechy Founder, Author, International Speaker, and Job Consultant. My role as the CEO of Wikitechy, I help businesses build their next generation digital platforms and help with their product innovation and growth strategy. I'm a frequent speaker at tech conferences and events.

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