There are 5 things to do before investing in cryptocurrencies and manage their own funds, at least from my point of view.
Let us proceed in an orderly manner.
The first time I heard about Bitcoin was in 2013, when it was selling on eBay and when it hit $ 1,000 in November.
Curious, I thought. The second time I heard about Bitcoin was in 2017, when it hit $ 20,000 in December. Curious, I thought again.
The third time was three months ago, in March 2020, after the accident of Covid and the impending halving. Investment? I thought.
In March 2020, I can say that I finally started my journey in the world of cryptocurrencies, which is radically changing my way of thinking about economy, finance and investment.
First, I will say that I am not a technician, 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 can follow this model avoiding scams and fraud in the world of cryptocurrencies.
The crypto space is indeed a suitable Wild West and for those of you who haven't noticed, we are in the midst of the digital Klondike.
These are my recommendations to consider before deciding to invest in cryptocurrencies:
1) Knowledge. Reading articles, following competent people and delving into the blockchain ecosystem is essential to have a better understanding. Forget the price! It is tempting, it seduces, but it is only the tip of the iceberg of this revolutionary technology. Learn about the history of the coin to understand the meaning of value and trade. An insightful book that I read and recommend is "The Bitcoin Standard" by Saifedean Ammous.
2) Mindfulness. Don't invest more than you can afford to lose. Set a number that if you lost completely today would not change your life. This is personal and depends on many factors. Think about it and stick to a head start when considering other forms of investment and accrual plans like DCA (Average Dollar Cost). Here is a website that allows simulating DCA in recent years in bitcoin.
3) Verification. A website must be totally secure. Be sure to invest in the official website of the exchange or wallet you are using / downloading. Always check the URL and read comments and feedback. In case you are not sure, please do not continue and go back to step 1. Time is money and the more you invest in knowledge, the more you will pay for your investments.
4) "Not your keys, not your cryptocurrencies" By 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. Having crypto assets means that you have your private keys stored securely.
5) Paper, pen and cold wallet. Last step, keep your private cryptocurrency keys in a cryptocurrency wallet. Once you have exchanged your euros in cryptocurrencies, you can send them from the exchange to your wallet for safe custody. On the official bitcoin website, you can find various wallets to store your tokens. Cold wallets are so named because they are offline, these also include hardware wallets.
This short guide is dedicated to those who are curious and want to take their first steps in this world.
Everything is very new, revolutionary, full of enthusiasm and ideas. Allow yourself a full 5 week 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 ask thousands of questions. Be curious. You will enter this world with overwhelming enthusiasm to the point that you will not be able to sleep at night.