Well, let’s take a look at 5 common mistakes people who are new to cryptocurrency make when new to investing.
Scams
People can fall for all sorts of scams, and it’s not just elderly people who aren’t familiar with technology. So it is important to be aware of them. Scams can range from simple email spam, saying “Click HERE to get free BTC NOW!” to more elaborate viruses that will hack your computer and use your hardware to mine cryptocurrency for them without you knowing.
Although, you can combat this with effective computer security, and it can be easy-ish to identify as it will use a lot of your computer’s performance power so if your machine goes from running like Sonic the Hedgehog to crawling like a snail, it may be worth scanning for viruses.
Bogus cryptocurrencies
Everyone is trying to find the next big crypto coin, and there are people out there who will take advantage. Look at the mobile app Bee for example. It’s an app that aims to be a cryptocurrency, and uses your phone to mine the coins. The more friends you invite, the more coins you can mine as they become part of your team, but it’s very much like a scam in that it’s likely never going to materialise.
It works by getting people in, and then they plough your app with adverts which is how they make money. They’ll release updates now and again to say how progress is going and how “they’re nearly there” when it comes to achieving their goals. But nothing will ever come of it as this has happened time and again with other apps. One of the main warning signs is the fact if you check your CPU on your phone, you’ll notice the app draws zero power, or near enough, so it’s not mining anything. You are literally clicking a button each day that sets a countdown clock. So be smart, avoid these types of apps.
Don’t sit on your crypto
Many people believe that investing is about sitting on your crypto and just waiting for it to rise. But it’s pointless, because it could actually fall in value and you’ll lose out. Instead, you could be making that crypto earn more money for you. Because they’ll let you bet with your crypto and return it to you as well, meaning you can increase your investment in BTC without all the costs and times of mining. Although, it can also go the other way so be careful.
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Mining – Is it worth the effort?
You may have looked up to see how you can go about getting cryptocurrencies, and no doubt, people will have asked about how to get some for free. But whilst mining is a free activity to do, there is a cost to it. Firstly, you have the hardware. Then, you’ve the power it costs to run. Whilst setting up your own crypto-farm may be a good idea in theory. The reality may be that it’s not that great at all.
What you need to do if you are going to mine, is work out your costs first, then using whichever mining software you go with, it’ll tell you how much you’ll be able to mine. Then work out if it’s enough to pay the power of running your equipment, and then some, because you’re going to want to pay for the hardware with your earnings too. If you can get all that money back, and make a profit in say a year, you’re on to a winner. If not, maybe just buy straight into crypto, after doing research on first. Plus remember, crypto currencies are not infinite, so eventually you won’t be able to mine any more.
Keep your eye on the ball
This is potentially the most important thing of all when thinking about common cryptocurrency mistakes, and one that many people forget about. You need to always be paying attention. Just like stocks and shares, crypto value can change overnight. It can rise by massive amounts, but it can also fall too. And there are numerous reasons why this can happen.
So, it’s important to keep your eye on crypto news, listen to what experts are saying, and even get involved in communities like those on reddit. After all it was thanks to redditors in part, for the impressive rise of Dogecoin. So, if you can jump on when they’re trying to force the prices high, you could be in for a few quick bucks. But, again, keep switched on, as it is all about timing, and you want to jump ship before it goes and hits an iceberg.
If you are new to the Cryptocurrency world and would like to open an account we recommend Cex.io.
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Disclaimer. This analysis and forecast are the personal opinions of the author that are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by cryptostation.co.uk. Readers should do their own research before investing funds.
Photo by Nick Chong on Unsplash
