New to Crypto? – Here’s a quick Bitcoin Beginners Guide
With the price of Bitcoin rising rapidly the last few weeks, we’re all going to be hearing about it a lot more. As it hits mainstream media, opportunities will start to arise, seemingly out of no where. So here’s my Bitcoin Beginners Guide. Aimed at helping you protect yourself.
To start, let’s be clear, I’m no financial adviser and this isn’t financial advice (see full disclosure at bottom). But I do have some experience, so here’s what I’ve learned. First a quick list of Do’s and Don’ts, with more detail to follow.Maintain control of your own bitcoin AT ALL TIMES
*** If you let someone else trade for you, realize all that money may gone at some point. ***
*** Never share Private Keys ***
*** Focus on security: Passwords, 2FA, etc. Don’t take shortcuts. ***
*** Don’t store anything on exchanges long-term ***
*** Be EXTRA EXTRA wary of ICO’s ***
*** Never invest more than you can afford to lose ***
*** Be critical of every opportunity. What’s the worst case scenario and can you deal with that actually occurring? ***
*** If you are going to trade…PRACTICE, PRACTICE, PRACTICE. ***
*** Use a VPN when trading, such as NordVPN***
*** Consult a tax professional ***
PROTECT YOURSELF / MAINTAIN CONTROL
CAN’T STRESS THIS ENOUGH. There will be plenty of opportunities that flash across your radar that obviously don’t pass the “if it seems too good to be true” test. However, there will be others that are not only tempting, but quite convincing.
They may show documentation of returns, have real testimonials from customers, or even be recommended by people you know and trust.
The number 1 question to ask is, who maintains control off your bitcoin or other crypto currencies? Do I have control at all times? Is someone else trading for me? Do they have access to my funds? If you don’t have real time access to the trades that are happening, you have no way of knowing if they are actually real.
Most important is that you should maintain control of your Bitcoin at all times. Otherwise, you’re just giving money to a stranger, who is mostly likely not licensed and is not a registered investment adviser.
That’s not to say that some of these opportunities don’t pay out and that some investors don’t profit. But what happens when the price of Bitcoin isn’t skyrocketing? That’s usually when they stop paying out. In the end, a lot more people end up losing money than making money. Is that something you want to be part of?
What is the Company’s Objective?
When considering anything, think about things from the opposite perspective. What is this company/opportunity focusing on? Are they providing a valuable service? Or are they just trying to promote and incentivize new members to sign up more members.
If it looks like they spend more resources on recruiting than on investing, that’s a red flag. If a company can’t survive without a constant influx of new customers, that is a problem.
Find Something That Empowers You Personally
By this I mean something that teaches you how to be self dependent. How to trade on your own, so that you control your own $$$ AT ALL TIMES. This is really the only way to do it in my opinion.
This can be done through both free and paid trading groups, or through other signal based trading services, where you make your own trades. The key is maintaining personal accountability. No matter where the trade idea came from, you are making your own decision to implement it and are therefore responsible for your own results.
SECURITY SECURITY SECURITY
This is where any Bitcoin Beginners Guide should start. Too many people don’t focus on this until they have an issue.
If you are going to be a long term holder, get a hardware wallet also known as a cold wallet. I use both the Trezor One and the Ledger Nano S. Both are great ways to securely store crypto. Just make sure to keep your backup key phrases in a safe and secure place offline.
Follow all best practices for all password creation and storage across all tools and platforms. This means, separate passwords for different sites (ideally different emails too). Also, if 2FA (2-factor authentication) is offered, absolutely take advantage of it.
Quite frankly, proper password management can be a pain. I promise you the extra effort is worth it. In a still highly unregulated space like crypto, if you get robbed, there’s not a lot you can do. But it is avoidable. So focus on preventing it.
LEARN BEFORE YOU EARN
There’s a ton of free resources out their to learn from. Don’t skip that step and just jump right in. Even if you are an experienced investor, these markets are different, and there certainly are things you aren’t even aware that you don’t know.
There’s no shortage of free resources out there, so its hard to just recommend a few. All I’ll say is that Crypto Coin Trader (CCT) is one of my favorite Facebook groups, and for technical analysis of price action, I like Crypto Crew University’s YouTube Channel. I’m not affiliated with either, I just like their stuff.
So, I hope this quick Bitcoin Beginners Guide helps. I’m certainly not a top expert on anything I’ve mentioned here. My goal was to bring some awareness to these topics, so you can do some more research on your own.
There are affiliate links in this article. They are all products that I actively and regularly use. I wouldn’t recommend them otherwise.
“CFTC DISCLAIMER: *Foreign Exchange, Options, and Digital Currency trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade or engage with these, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Educate yourself on the risks associated with foreign exchange, options, and digital currency trading, and seek advice from an independent financial or tax advisor if you have any questions.”
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