Top 5 crypto mistakes that you should not make
As we move into 2022 I want to share some of the things I have got wrong in the past and some of the things that I see new people entering the space constantly doing wrong. At the end of the day we want to make sure that we are making money and more important, make sure that we are not losing it. Therefore in this short article I will tell you about my top 5 crypto mistakes that you should not make.
Security is extremely important for anyone operating in the crypto space. There are a number of things you need to understand to stay safe.
The seed phrase is like a key to your vault, so the writing down of the characters/words and storing it safely is the thing that basically controls your assets. So every time you open your wallet you are going to be given an opportunity to write down your seed phrase. Make sure that you do!
Where you store that seed phrase and password around the access to that wallet are also extremely important. One of the most easily made mistakes is either the loss of the password or seed phrase.
You could use a hardware wallet such as a Ledger, plus there are also multi-sig wallets. Which option you choose will depend on the size of capital that you own.
One of the top tier mistakes that people often make is around the failure to write down their seed phrase correctly, a lost seed phrase or a forgotten or lost password. If you do this its effectively like losing all of your assets and you certainly want to avoid this at all costs.
# 2 Hacked Accounts
Hacked accounts usually happens through email phishing, repeatedly weak passwords, not using 2 Factor Authentication and something like a SIM swap where you get into close proximity to someone and they steal your data.
Email phishing is quite easy to spot; don't open any weird links, don't fall for any scams in general (check out my article on scams) based off of the unknown sender mentality.
If you receive an email that just sounds too good to be true, like the Prince who is going to give you millions of dollars and all you need to do is send them 2 Ethereum, the Prince is lying to you!
A base standard for passwords should be something like 11 characters with capitals, lower case, numbers and symbols.
Don't get hacked and lose all of your capital by doing silly and avoidable things.
Lately some of the hacking has been a little more sophisticated around websites that look very similar to the website that you are trying to visit. There will be a slight misspelling of the name. Therefore you want to be very careful that all of the addresses that you are typing in are absolutely correct; this is very important as you want to be aware of exactly where you are visiting online.
Telegram is a social chat platform that is commonly used in the crypto space. Groups are typically set up by projects or communities to provide users with information and advice. One important thing if you are an active participant in Telegram groups is that you don't take support from people that you don't know.
Let's say you are trying to get into an IDO or you are having problems with one of the exchanges you have an account on and you join their Telegram channel. It's likely that people are going to start sending you direct messages saying that they can help you and that all you need to do is leave a message, your number and account details; they may even go so far as to ask for your password. Be very careful, whenever you go into Telegram people are going to try and scam you.
Exchange support in Telegram is almost always a bad idea and if you are having a conversation there make sure all of your security preferences are set appropriately. Never share what your cell phone number is so they have a much harder time trying to figure out who it is they would want to SIM swap.
#4 Incorrect Addresses
When you are sending crypto you must have a good operational security procedure that you always stick to for when you are moving funds around. For example I will always send a test transaction. No matter how many times I've done it I want to make sure that everything works. There are a few reasons for that, but its better to have a good operational security practice than to just hope that everything goes through each time.
Make sure that the funds you are sending don't accidentally have an old address copied in the clipboard from the last place that you sent some crypto to. This is actually more common than you think.
#5 Selling Assets Too Early
The idea of taking profit in an A-symmetric world can be very deceiving, because sometimes the best thing to do is nothing. When you have an investment that can go up 150x and you take your profit at 10x it feels like a mistake, you made a good investment but you did the wrong thing, you didn't walk away.
I realise that this notion is a hard concept to accept because everyone wants to take profits on their good investments, but if you have a proper time horizon for a good investment, which should definitely be a few years as opposed to a few months, you could be looking at a significantly higher upside than it was when you sold early.
In 2020 for example I bought a little Matic that I sold far too early because I was stoked about the 10x return that I'd achieved. If I'd held for another few moths that would have turned into over 100x. So one of my biggest mistakes was previously not understanding that A-symmetry in crypto has the potential to be an extraordinarily high number and that patience and a consistency in the investment is the best strategy. So buy right and sit tight!