The world of cryptocurrency is known for its lucrative rewards but also for the risks posed to newcomers. Some have lost millions of dollars worth of ETH or BTC, through scams or simply by losing their private keys.
On the other hand, those fortunate enough to have held on to their coins or to have been involved in a successful Web3 project have made millions and even hundreds of millions of dollars. There are plenty of
But that’s not really the point of the new era of distributed ledgers and cryptocurrencies. It’s time to introduce a more reliable mechanism of rewards and a more emotionally balanced approach to investing.
#1 - Understand Hacks and Scams
The most common, in fact - the only - way that people lose their investment is by sending it to online scam artists. They actually send their cryptocurrency to a wallet address given to them by a scam artist. And then their funds are gone and cannot be retrieved. Some of the scams are astonishingly clever and intricate. But the vast majority are simple, basic, and easily avoidable.
As a rule of thumb, just never send your cryptocurrency to another wallet address unless you are 100% sure it is legitimate. This is especially true on sites where you buy/sell cryptocurrency. Never release funds until you have proof or a reliable escrow system.
And do not invest in new projects unless you have a good reason to and have conducted research including history, on-chain information, off-chain information, founders, financial backing, time in business, and other basic metrics that you would apply to any investment. Information gleaned from YouTube and Reddit is not information - it's just opinions.
Social sentiment is only useful when correctly analyzed in the context of other data sources. Scam artists are particularly active on Reddit and other sites. They will pretend to be representatives of Web3 projects and ask you to send your cryptocurrency to a “special account” so it will be safe. It might even be a good idea to read up on the
Crypto newcomers are most likely to lose their funds by sending them to a hacker’s wallet or by misplacing their private keys - coin depreciation is the least of their concerns and wallet security is priority number one.
#2 - Utilize Security Protocols
Closely related to the first point is that of basic security protocols. Two Factor Authentication (2FA) is an essential security feature where you will receive a text message after you log in to an online application. This second layer of security ensures your account is safe, even when your email address and username are compromised on a given site.
You will also want to keep your funds stored in a secure local or hardware wallet. You can download an application such as
This means that another site is set up that looks exactly like the one you use to store your funds. When you input your username and password, it goes straight into the database of the hacker, who uses it to access your funds on the real site. This is where 2FA can show its value - even if you gave away your username and password through a false site, it would prevent hacker entry.
The most important security protocol is to make two secure copies of the private keys to your wallet. If you lose these keys, you lose your wallet and it cannot be recovered.
2FA and using a local wallet are the most simple and effective mechanisms to protect yourself in the world of cryptocurrency.
#3 - Take Advantage of Available Technology
There are multiple tools and applications that can assist in terms of crypto and NFT investment. The Web3 industries are so fast-paced that these tools are sorely needed to make sense of the innovation and the sheer amount of data.
Tools provided through enterprises such as
Defy Trends aggregates the relevant information and presents it to users in an easily-digestible format. Coins and NFTs are given a score that helps users to assess whether a coin/NFT is undervalued or overvalued.
This is an extremely attractive option to those looking to gain exposure to the new era of cryptocurrencies but with absolutely no help from the mainstream crypto economy. The blockchain ethos can be pretty brutal; if you lose your keys or did something silly, it’s viewed as being your own fault.
Tools like this are exactly what market newcomers need. It helps to perform due diligence on coins (preserving your investment, something sorely overlooked in the current market) and to spot new opportunities.
The score is based on a number of data points including on-chain info, off-chain info, social sentiment, whale tracking, and HODL metrics. In other words, all relevant data is aggregated and presented to investors so they are armed with the necessary information to thrive.
A tool that aggregates token and NFT information and presents it in a clear and easily understood manner is critical to long-term profitability.
#4 - Adopt a Long-Term Approach
Once you have a firm grasp of the operating principles of blockchain technology and how to protect your funds, it's time to invest with a long-term approach. This requires emotional resilience because there is always some new coin that is going to the moon within the next couple of weeks. It’s hard to resist all of the hype and hysteria, but it can (and must) be done.
While most NFTs and cryptocurrencies will go up and down on a short-term basis, the general trend has most certainly been upward on a yearly basis. Just analyze the charts from 2008 to 2022. So the simple principles of diversification in high-quality coins is a safe and effective option. If you extend your timeline to 2 years instead of 2 weeks, then you are very likely going to win at this game.
It will also save a lot of stress of continually refreshing your browser to see if a coin went up on a minute-to-minute basis. Investment is safe and easy for most, with some practicality. In contrast, intraday trading is often reserved for a few dedicated individuals with time and commitment to spare.
Some investment principles are timeless - make sure you hold on to your coins for reasonable time periods and only swap or trade for legitimate reasons.
Make Safe Investments
NFTs, cryptocurrencies, and distributed ledgers are likely the future of the global economy, especially as the internet-of-things comes to fruition. It’s important to preserve peace of mind and to stay practical in a society flooded with information from all angles. Get to know the industry, take a long-term approach, streamline your investment decisions with empowering tools, and be patient.
If you are happy with getting rich slowly as opposed to quickly, then you are well on the way to responsible and sustainable investment. Particularly in an era based on quick but often short-lived profits.
After all, the best-performing funds are ones where the owners
And one of the best investment strategies would have been to purchase BTC as early as possible and store it securely, without touching it.