One of the biggest difference in the crypto market and the stock market is the timeline. While the stock market is open 5 days a week, 7 ½ hours a day; crypto is a 24-hour global market.
When you first enter the crypto market, you’ll notice that 1 week feels like a life time. There is so much news and information coming out that it is substantially impossible to keep up with it all.
There is a reason why you see the term “HOLD” so much. Those who are patient get rewarded.
Not doing your own research
Also known as due diligence. In the investment world, due diligence is the full investigation of a product and transaction before a transaction takes place. For individual investor, an investigation on a cryptocurrency is voluntary but recommended. Due diligence insures that you are fully inform on the investment.
Go to the website of the crypto you are interested in and start researching. Read everything. No stone must be left unturned. Find out as much as you can about the development team, read the white paper, and be extensive.
Jumping into mining expecting big profits
People have been mining Ethereum and Bitcoin for years now and some of them have seen amazing gains, especially when their operation is that of a decent size. Mining has exploded recently in places like Eastern and Northern Europe for two reasons.
- Cool climate: mining crypto generates a huge amount of computer heat and power. Natural temperatures save money on cooling costs
2. Cheap electricity
So, while you may be tempted to go start your very own mining rig, remember that mining takes a lot of electricity and for some it is simply not worth it. It probably best for newcomers to avoid mining but if you are still interested please read our Ethereum mining guide.
Not asking for help
Personally, I’m who I am today because of the support, encouragement, and knowledge that I’ve picked up from amazing crypto-communities. Going it alone is not an option here. You need good crypto friends. Reddit is a good place to start when looking for communities overall. From there you can fine-tune what exactly you’re looking for.
A few of my favorite communities:
Not double-checking your transfers
You’ll be surprised how many will send crypto to the wrong address. You need to slow down. Double check the exchange wallet and make sure it matches the coin you are sending. Don’t send ETC to an ETH wallet, or else you’ll never see that ETC again.
Another tip is to always send a small test amount first. Especially if it’s a new wallet you haven’t used before. It is better to send a little amount, watch it go through on the blockchain, and then send your big amount next.
Not using 2FA
Two-Factor Authentication – or 2FA - is an added second layer of security after a password.
2FA is a short, 6-digit number generated every 60 seconds by a mobile app such as Google Authenticator or Authy. You’ll enter this number as a secondary password to verify you are the owner of the account.
We recommend using the 2FA app: Authy as they backup your database for you in case you ever lose your phone. Make sure you enable 2FA on every cryptocurrency-related accounts, including email accounts associated with any exchange.
Listening to the FOMO and FUD
Fear Of Missing Out and Fear, Uncertainty, and Doubt sometimes gets the best of us all. You need to realize that crypto is a huge market now and things are moving fast. There are going to be so many potential opportunities in the next coming years. If you are reading this you are still on the ground floor and already ahead of 95% of the market. There will be other amazing coins and gains to be had in the future.
Always keep bookmarks of all your used crypto sites on your computer. Never ever click links you find on social media even if it looks safe.
Phishing scams have gotten extremely sophisticated over the years. If you see a site and something that sounds too good to be true to go along with it; proceed with caution.
Leaving all your assets on an exchange
This might be the biggest loss of crypto to date. When you keep your crypto on exchanges you don’t have the “private keys” to that wallet. This means your wallet is being hosted on that exchange. If that exchange were to go down and get hacked, wave bye bye to your crypto.
Even after the Mt. Gox hack, hundreds of millions of dollars are still entrusted to exchanges that have the potential to be compromised.