There are 5 things to do before investing in cryptocurrencies and handling your own funds, at least from my point of view.
Let’s proceed in an orderly fashion.
The first time I heard about Bitcoin was in 2013, back when it was being sold on eBay, and when it reached $1000 in November.
“Curious,” I thought. The second time I heard about Bitcoin was in 2017, when it reached $20,000 in December. “Curious,” I thought again.
The third time was three months ago, in March 2020 after the Covid crash and the impending halving. “Investment?,” I thought.
In March 2020 I can say that I’ve finally begun my journey in the cryptocurrency world which is radically changing the way I think about economics, finance and investment.
First, I’ll say that I’m not a techie, a trader or an economist. With this humble article, I would like to describe the steps I have taken to invest in this complex world so that those who want to embark on this journey will be able to follow this model avoiding scams and frauds in the wild crypto world.
The crypto space is, in fact, a proper Wild West and for those who have not realized it, we are in the midst of the digital Klondike.
Here are my recommendations to consider before deciding to invest in cryptocurrencies:
Reading articles, following competent people and delving into the blockchain ecosystem is fundamental to have a better understanding. Forget the price! It’s tempting, it seduces, but it’s only the tip of the iceberg of this revolutionary technology. Learn about the history of currency to understand the meaning of value and trade. An insightful book I’ve read and recommend is “The Bitcoin Standard” by Saifedean Ammous.
Don’t invest more than you can afford to lose. Establish a figure that if you were to lose completely today it would not change your life. This is something personal and depends on many factors. Think about it and stick to an initial figure by considering other forms of investment and accumulation plans such as DCA (Dollar-Cost Averaging). Here is a website that allows simulating DCA in past years on bitcoin.
A website must be totally safe. Please make sure to invest on the official website of the exchange or wallet you are using/downloading. Always double-check the URL address, and read reviews and feedback. In case you are not confident, do not proceed and go back to step 1. Time is money and the more you invest in knowledge the more it will pay off on your investments.
4) “Not your keys, not your crypto”
When choosing a secure exchange website to convert your money into cryptocurrencies, those cryptocurrencies will NOT be yours. These are your euros expressed in the value of a cryptocurrency and vice versa. Owning crypto assets means you have your private keys safely stored.
5) Paper, pen and coldwallet.
Last step, keep your cryptocurrency private keys in a crypto wallet. Once you have swapped your euros into crypto you can send them from the exchange to your wallet for safe custody. On the official bitcoin website, you can find several wallets to store your crypto. Cold wallets are called this way because they are offline, these also include hardware wallets.
This brief guide is dedicated to those who are curious and want to take their first steps in this world.
It’s all very new, revolutionary, full of enthusiasm and ideas. Allow yourself a 5-week full immersion to explore each of these 5 points, I guarantee that every little discovery will lead to a new one and so on.
Ask questions, read and raise thousands of doubts. Be curious. You will enter this world with overwhelming enthusiasm to the point where you won’t be able to sleep at night.
Andrea M Biotti