Skeptics around the world believe that cryptocurrencies are the biggest bubbles to ever exist. But who cares? We’ve been following the charts for a decade, enjoying the ups and downs – the reds and greens – and witnessing people predict the fall of cryptocurrencies over and over again.
Bitcoin alone died 90 times in 2018. But what happened when we woke up on the first day of 2019? Bitcoin and other cryptocurrencies were alive and kicking and we’re still trading.
The year has just begun. We are going to cash in on our trades, monitor the charts to see when to buy and when to sell, and wait patiently for our lambos. But we can’t forget what 2018 did to many of us crypto traders. The year was rough, and the Bull Run never quite materialized. Frankly, a lot of us lost our shirts.
How do we survive the 2019 crypto trading storm? Here’s a simple but powerful guide to keep you going – securing your hard earned money, trading responsibly, and of course, cashing in on the industry without falling victim to hacks or scams.
Don’t get caught up in 2018-like scams
While many traders in 2018 cashed in on their investments, a lot of us had sleepless nights because of the many crypto scams, exchange hacks, and fake ICOs. In fact, some of us even dodged 2018’s Christmas dinner with our families to save face.
Coincheck lost about $530 million in NEM coins, an amount greater than Mt Gox’s hack, and the largest crypto exchange hack in the industry’s short history. Just a couple of days after Coincheck’s hack, Bigrail was also attacked, with thieves making off with $195 million worth of cryptocurrencies. Other exchanges were also attacked, including Coinrail, Bithumb, and Bancor. Overall, over a billion worth of cryptocurrencies were swept from exchanges according to blockchain firm Chainalysis.
But it wasn’t just crypto exchanges. There were many other cyber attacks on cryptocurrencies, including phishing attacks, pump and dump schemes, fake buy & sell walls, Twitter frauds, fake ICO projects, and market manipulation among others. So the question is – how do we avoid these scams in 2019?
The don’ts of the responsible crypto investor in 2019
The year is fresh and this time, we are making sure that we don’t get caught up in exchange fraud and other crypto related scams.
Don’t leave your money on exchanges
In holding billions of dollars, crypto exchanges attract a lot of hackers. And looking at how a chunk of our money has already been taken away through these platforms, it is only right that we take the responsibility of keeping our coins safe. How? By ensuring that you keep your crypto out of exchanges, especially if you are not a day trader. Even for day traders, it doesn’t hurt to transfer your earnings once in a while to a hardware wallet in order to keep them safe.
Don’t run after every altcoin.
By now, your portfolio as a cryptocurrency trader is made up of an “army of altcoins”. But remember that not all altcoins are the same. Data from Dead Coins shows that close to 1000 altcoins are dead and will never return to the cryptocurrency market.
In order not to witness the obituary of an altcoin you’ve invested in, you need to be vigilant about which altcoins to trade. Make sure you are diversifying into valuable coins and not those that will eventually be wiped out of the market.
Don’t just buy into any ICO you come across
Although the ICO market is not booming compared to 2017, a few projects are still coming up. And it’s good to be careful not to jump on any ICO project just because you think it’s “cool”. You need to be cautious by making sure that you undertake your own due diligence, from the team to the project, in order to make your decision.
The responsible crypto trader – what to do in 2019
You are protecting yourself on crypto exchanges, scrutinizing ICOs before investing, and analyzing altcoins before trading them. But to be a responsible cryptocurrency trader in 2019, you need to go further. Here’s how to be proactive in dealing with cryptocurrency scams.
Consider migrating to a decentralized exchange
What happens when we have decentralized digital assets on centralized platforms? Our assets are prone to cyber-attacks. Your best bet as a crypto trader this year is to consider using a decentralized exchange. Unlike centralized crypto exchanges, decentralized ones do not use third party services to hold customers’ cryptocurrencies. They also do not have a middleman to handle private keys. Each user has access to their own private keys.
Additionally, decentralized exchanges are censorship-resistance, meaning central authorities cannot ban or force their closure. They also facilitate faster and cheaper transaction processing, come with intensified security, and in some cases, leverage smart contracts to expedite the transfer of digital assets from wallet to wallet.
In essence, there is no single point of failure, no single point of regulation, and no single point of control when it comes to decentralized exchanges (DEX). Some of the best and well-known decentralized exchanges in the game include OpenLedger DEX, IDEX, Oasis DEX, Waves DEX, Bisq, OpenANX among others.
Make use of the different types of wallets
Hardware wallets are the safest in the game: private keys are stored securely, they are not prone to computer viruses, and they come with highly secured encryption technologies. But hardware wallets are not ideal for every situation, especially for day traders. Use hardware wallets when you want to hold a particular cryptocurrency for a long time. However, if you want to be trading all the time, hardware wallets are inconvenient.
This means that a trader who moves money up and down, from exchange to exchange, and from wallet to wallet all the time needs an online wallet. For security reasons, you need to make sure your online wallet is highly secured. Use strong passwords, create a specific email for your crypto wallets, and use 2-factor authentication.
There are state-of-the-art, secure hardware wallets at your disposal, including LedgerNano (recently reviewed), Trezor, and LedgerHQ. With these wallets, you are assured of multilayer security and decoy wallets for your cryptocurrencies.
Final tips on how to be a responsible crypto trader in 2019
Most of us crypto traders are lazy. We invest so much in virtual currencies but use substandard security measures to protect our hard earned coins. This is the time to sit up. Because as you are bracing yourself for 2019, the hackers are equally spending sleepless nights designing penetration systems to get you. So what else can you do?
Be careful of your browsers.
Pay attention to your PC
Do you have the latest firewall? Is your operating system good enough to weather any attacks from malicious actors? Do not assume that your system is up to date just because it performs normally. Make sure you have an antivirus, a firewall, and a strong operating system.
Backup your information
Just as in life, a lot of things happen along your cryptocurrency trading route. Accidents can occur, your device could be stolen, you could experience a crashed disks or any other accident. Always make sure that you have a backup of your cryptocurrency information, either on encrypted file servers or thumb drives so you can restore your data when something goes wrong.
*Remember, Crypto Insider does not provide investment advice. Everything you read here is a matter of opinion and should be taken as such.