Cryptocurrency is the term much familiar for everyone in this era. It has changed the trend of physical currency and all equations of the economy. It is a virtual currency which does not bear any physical presence in any form, and yet it is much popular among the users. It is purely a product of technology, and one can still buy and sell various items if one has this currency in his wallet. However, this currency is technical and hence for those who are sound with technical knowledge are also prone to make some serious errors which can prove much challenging.
The crypto industry is spreading across the world, and many new players are entering the market on a daily basis. Even though the markets are usually volatile due to various external factors influencing the price of cryptocurrencies, there are many people who are making good money by making smart moves. You can also invest in cryptocurrencies and get the best returns if you follow the proper guidelines and avoid costly mistakes. Even though every trader or investor makes mistakes in the market, it should not be costly in a way that it can damage your portfolio. In this regard, let us consider some of the top mistakes made by beginners when they enter the crypto markets.
1. Not keeping private safe
Many people make the mistake of not keeping the private key safe. This is your only access to the coins, and if you lose your keys, there is no way of proving that you own the coins. It can be lost forever, and every year, millions of dollars worth cryptocurrency get lost in this manner.
To avoid this problem, novice investors store their keys online with exchange services. This can be very risky, and you should never trust such services. On the other hand, you should always store them in secure offline wallets where digital assets can be stored forever without any hassles.
Do not think that this is like any other password to your bank account or any other trading account where you can reset the password or request the service providers to provide you with a new password. There is no option in this case, and your money is gone forever if you lose your private keys.
2. Relying completely on digital records
Many people find it convenient to store important things on computers and phones as they can easily access them whenever required in the future. However, when your devices crash, you will be left with no option to retrieve them, and you can lose your money in this manner.
Storing the crypto information like wallet addresses and passwords on electronic devices can be risky as there is a risk of data getting corrupted in the future. For this reason, you should never rely only on digital records and also go for a hard copy of such important information.
The simple thing you can do in this case is to write them down in your important books and keep them safe at home. In this way, even if you lose the digital records, you will still have a hard copy of that, and you can use it to gain access to your digital wallets.
3. Sending money to incorrect crypto wallets
When you are sending money through bank accounts or other means, if you make a mistake in the account number, you can inform the banks and ask them to revert the transactions. However, in the case of cryptocurrency transactions, you will lose your money if you send them to the wrong address.
For this reason, you should carefully check the address before sending cryptocurrency and ensure that it belongs to the right person. Always double-check the address and take a printout of the transaction after it is completed for future reference.
You can also try to copy and paste the address instead of typing it so that it reduces the chances of entering the wrong address. In the same manner, you should also check the type of wallet before sending the currency. If you transfer ETH to a BTC wallet, it can lead to errors, and you may lose your money in this manner.
4. Neglecting two-factor authentication
One of the best ways to protect your account from hacking and scam is to use two-factor authentication. In this way, you will be making it difficult for hackers to gain access to your accounts as they cannot access the account by just using your password.
Most exchanges provide such facilities, and you should always insist on using such two-factor authentication methods. In most cases, you will be using a standard password and another dynamic code that will be sent to your mobile phone or other devices to access the account.
In this way, anyone who wants to gain access to your account should have both these codes, and this is very difficult for most people. In this way, you will be able to easily protect your account from many problems in the long run.
5. Not using mining calculators
Many people think that it is easy to make money by mining cryptocurrencies. However, you need to spend lots of money on rigs, and it also consumes a lot of electricity. In this way, if your efforts are not getting suitable rewards, you will end up making a loss in the future.
For this reason, you should always use a mining calculator and check the expenses involved in the process. Once you are sure about rewards, you can enter into mining activities and earn good money from the crypto industry.
These are some of the top mistakes made by crypto beginners, and you can easily avoid them by taking care of your steps in the initial days. Once you get familiar with the hazards, you can easily avoid them in the long run and make good money from your investment. There is no need to panic when you can avoid these costly mistakes in your beginning days.