How To Protect Your Crypto Investments

By
Rafael Vieira (CreativeCompany.com)
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Investing in cryptocurrencies is a cycle of

  • Selection
  • Accumulation
  • Curation
  • Protection / Hedging
  • Disbursement/Profit.

Protecting your crypto investments should take place in each of these steps.

Selecting a Cryptocurrency for investment

It is impossible to know which cryptocurrency will still be around in ten years. The Cryptosphere is very competitive and the top 100 are changing all the time. The top 5 at this time are pretty constant, and these will most likely be your first port of call. Start small, very small Initially invest in one, and learn about it as much as you can. Make mistakes with little amounts. Take baby steps Choose carefully your sources of information and take all advice/news with a pinch of salt Use established companies likes CoinBase, BitPanda and Bitcoin.de to buy your first Bitcoin or Indaccoin if you want to buy with a credit card. I cover strategies of analysing crypto investments here:

Accumulation crypto assets

Once an investor decides which crypto token to invest in, they should follow the age-old advice of slow but steady accumulation. Time provides plenty of opportunities for reflection, for competitors to come forth and for the initial dust to settle. While you accumulate you learn more on how the crypto project is developing and if it is delivering. On cryptocurrency exchange like Spectrocoin, you can set buy orders for Bitcoin at certain levels. This allows you to “catch the dips” and buy at the prices you want to buy rather than at the market price. Given the cryptosphere is very volatile, then going all in might lead to disappointment as the market could tank.

Read more: Building a cryptocurrency portfolio

Protecting your crypto assets

Cryptocurrencies and tokens can be lost or stolen easily:

    • Corruption or destruction of data
    • Remote Theft
    • Physical Theft
    • Hacking
    • Socially Engineered Attacks
    • Scams

Crypto assets at their very basic level are data. Protect the data and your assets will be protected. In order to be safe consider; Accessibility of data to malicious actors Consider also, what information you are giving the world about yourself.

How can malicious actors use it against you?

Information from Spyware such as Mobile Applications, Trojans, Viruses, Cookies Social Signals such as Twitter, Meetup, Facebook, Bitcoin forum Discussions. Can be used against you.

When dealing with cryptos you need to assume that there are thieves who are actively trying to steal your coins. This is not an assumption, this is a given.

For example:. If you announce that you will be leaving for a week to a Bitcoin conference, your house has suddenly become a very attractive target to diligent thieves. Installing applications which can monitor your browsing behaviour or can access your social profile can also provide thieves or hackers with crucial targeting information. Careful cryptocurrency investors need to protect the full spectrum of internet footprints in order not to attract the wrong kind of attention:

Installing applications which can monitor your browsing behaviour or can access your social profile can also provide thieves or hackers with crucial targeting information. Careful cryptocurrency investors need to protect the full spectrum of internet footprints in order not to attract the wrong kind of attention.

Read More: The risks of ICOs 

Using certain types of browsers or add-ons to certain browsers reduces their ability to collect information on you. Rules of Thumb to protect your crypt investments:

  • Always you 2FA (two-factor authentication)
  • Keep funds on exchanges for as little as possible
  • Keep off-site backups

Hedging crypto investments can be done with margin trading. Poloniex and Bitfinex both offer this service.

Tools to protect your crypto investments:

Curating your cryptocurrency portfolio

Once invested in a particular cryptocurrency, you have the option to either store it safely and let it be or to follow all developments in that space. Buy and hold is referred to as “HODL” or hold long term. Both approaches have their pros and cons, the laid-back approach gives you time to focus on other priorities and avoid emotional roller coasters.

The more intensive approach is an opportunity to learn and discover other opportunities. Following the crypto news is indeed a roller coaster because the crypto media are after more eyeballs. To do this they launch articles with titles containing emotional hooks, be aware of clikc bait.

information on the cryptosphere are

Profit Taking / Disbursement

Taking profit is never a bad idea in the cryptosphere. The market is extremely volatile and can easily throw a hissy fit on any minor news item or rumour. This space is also not immune to fake news. Having a clear objective for each trade will make your crypto adventure more structured and less irrational. A bird in the hand is worth more than a 100 in a tree. Be aware of survivor bias, that is thinking you can take profits early before all the other investors are rushing to the exits.

The market is extremely volatile and can easily throw a hissy fit on any minor news item or rumour. This space is also not immune to fake news. Having a clear objective for each trade will make your crypto adventure more structured and less irrational. A bird in the hand is worth more than a 100 in a tree. Be aware of survivor bias, that is thinking you can take profits early before all the other investors are rushing to the exits.

Be aware of survivor bias, that is thinking you can take profits early before all the other investors are rushing to the exits.

Conclusion

The benefits of cryptocurrencies can be dismissed by those of us who have a stable currency to work with every day. Up to now, we have taken money for granted and thought of it as an object rather than a verb. The benefit of cryptocurrency is that it decentralises money, it removes a single point of failure in a complex financial system when you own a part of the crypto economy no matter how small, an investor also gets the attributes of resilience and decentralisation.

The benefit of cryptocurrency is that it decentralises money, it removes a single point of failure in a complex financial system when you own a part of the crypto economy no matter how small, an investor also gets the attributes of resilience and decentralisation. However

This resilience comes with risks of loosing your bags (full of coins) if you do not make secuirty part of every step of your crypto investing.

Still interested in investing in Cryptocurrencies? Have a look at our Tools pages, where you will find all the links to get you started.

Investing in cryptos is highly risky!

Comments: What techniques do you use to protect your crypto investments?

 

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