1. Newbies usually fail to keep track of EVERYTHING. Back up your passwords, transactions, time stamps, wallets, all for your own security and prevention in case you have any tax issues. Store them somewhere secure.
In the crypto world (most of the times) there is no one to reset or back up your information in case of loss or theft. If you lose it — you lose it forever. This is something that should be done from the moment you step into the cryptocurrency industry.
Ps: Learn about cryptocurrency taxes in your country of residency and stay on top of it because laws around this new technology are changing constantly, which is the reason why you should keep good track of every transaction you make, so you do not end up having to pay 300% of your crypto profits to any tax agency.
2. Live. Breath. And Eat All Crypto. Resist the urge to never leave the cryptocurrency world. Whenever we first learn about cryptos it is impossible to stay away from it, I admit it, once you understand the concept it is difficult not to indulge and be all in. But, the people around us may not be and it is important to become inclusive, share with others what you have learned about the ecosystem while keeping your feet on the ground. The world is not all about crypto. At least not yet.
“It’s easy to forget there’s an entire world outside of the crypto community when you’re deeply ingrained in it.” — Sam Radocchia
3. The belief you will get rich overnight. This is a bad one guys. It is the same mistake many people make when they first get into stocks, day trading, etc. They all believe they will become trillionaires in a short period of time. That is a lie. Even if you see true stories about it, that is a very, I repeat, verysmall percentage of the people. Trading cryptos is hard work. This ecosystem requires all the same steps to success as with any other industry or market… Hard work is the path that could lead you to get rich.
You might want to read “Five Epic Crypto Millionaires”
4. Fear of Missing Out (FOMO) Once you start following the crypto groupies you will hear opinions about which coins to buy, or when to buy or sell coins ALL THE TIME, and such opinions could be right on the money, but you must know whether it fits with your plans or not. Wait, dear newbie do you even have a plan? We will talk about that a little further along.
For now, understand that new opportunities arise daily, so do not fear missing out. Rule Number #1 in trading is NEVER TRADE WITH YOUR EMOTIONS.
5. Relying only on what experts are saying about a particular token or crypto. That is not smart, don’t be lazy, though it is okay to study such comments, always do your own research about the coins, tokens and exchanges of your choice, and make some time to learn the basics of technical analysis and fundamentals. Do not rely on others to buy or sell. Period. (NO, NOT EVEN YOUR BEST FRIEND.)
6. Lack of planning and patience. The most patient will be the most rewarded. This is true in stocks and it is true in the crypto world as well. Create a solid plan; do not just go shooting everywhere. Once you have a plan that fits your lifestyle and budget STICK TO THE PLAN. Resist the urge to move around or outside your trajectory. Try not to follow the crowds. And be patient during volatile times, eventually the ecosystem will stabilize.
7. Trusting others to care for you cryptos, including exchanges. This should be obvious, but you would be surprised at the number of people who entrusted their private information to others. Sometimes it is a necessary evil, I do agree that there´s a need for exchanges for example, but did you know you are giving them your private key? So please be careful which exchange you choose to “trust” and take advantage of all the security gadgets these exchanges offer (like 2FA).
Do not keep all your coins in a hot wallet or in exchanges, unless you are transacting them daily. Get a cold wallet for the coins you are hodling. And never-ever-ever-ever-ever-ever share your private keys or personal information with anyone or anywhere.
This ecosystem is an entirely new way of doing business, we must let go of our centralized mindset which once led us to trust others to keep us safe, and understand once and for all we make our own security in the crypto realm.
You might want to read: “2019 MUST BE SAFER THAN 2018”
8. Not taking part in Communities or relying too much on them. Joining communities is something very important (you might want to read our blog post called “Cryptocurrency Communities: Why get involved?”), but you must not rely on them alone. Take a healthy part in them, cryptos need you to play your part in the community, but do not make your trades based solely on what is being said within the communities.
9. Not knowing your type of investor profile. Have you been watching the cryptocurrency market? How exactly do you feel about it? Do you own any cryptos? Did you lose money? Did it make you cringe? Or are you positive all this volatility will be worth it in the long run? Questions like these can determine what kind of investor you are (conservative, moderate or aggressive), and given that cryptocurrency is a market high of risks, not every profile, most likely conservatives, will fit well, unless they change their mindset about how to see the cryptocurrency ecosystem in the present moment.
An investor profile determines an individual´s preferences in investment decisions, it defines your investment style, which will lead you to understand what kind of investments is best suitable for you.
“I bought my first BTC at 30$ and watched it tumble to 2$ in the next year. If you can’t stomach a 90% drop in crypto, don’t adopt early.” — Charlie Lee creator of Litecoin
According to your profile, you can determine how to admin the cryptocurrency market. If you are moderate or aggressive, you will be fine with the volatility, but if you are a bit more conservative, you cannot approach the technology as an investment which you aim to make a profit, or else you will act out of fear at the first loss. As of now, any investor is actually investing in the technology; this is beyond a profit, cryptocurrency blockchain is the future as we know it, and that is what you are investing in, in the expansion of the technology.
Newbies must understand that in this early phase of the crypto market, there are no guarantees except for the technology. At this point, Moderate and Aggressive investors are okay with these risks because their profiles are inclined to focus in the long run even if they lose money for now. Conservatives, however, are freaking out lol.
If you would like to find out your investor profile, there are several suitability tests, search for one on google.
10. A tendency to form clans or to be a part of one. Leave your options open to new possibilities and opportunities. Resist the urge to divide into clans as most people do in the crypto world. You do not have to pick a side, diversify; understand the need for all sorts of projects, instead of seeing them as a threat to each other.
Cryptos are unique, they are not equal, and yet, they each serve a purpose. They can coexist in harmony ❤. But what do I know, ask Andrea Antonopoulos what he thinks, after all he is the expert.
Final Thought: Making mistakes is a natural part of any learning process, and though one could grow much from it, some slips can also cost you a lot of money especially in this industry.
We have all been through this process somehow; my only desire is to help newbies to make the best of their cryptocurrency and blockchain experience. We need educated participants, people who know what they are doing, and why they are doing it. If you know someone who could benefit from at least one point in this list, please make sure to share!
And if you have any other advice, please drop it in the comments!
Hope you have a successful journey!
Until next time,
Disclaimer: Our team works hard to bring you the best content in the cryptocurrency market, but it is only our point of view and not legal advice, and may be divergent from other opinions, so please do not make any decisions without concluding studies of your own to understand the profit possibilities and uncertainties involved at your own risk.