After being involved with cryptocurrencies for about 5 years now, I gained some knowledge about practices which could bring success. Read on and if you feel like, please do give your opinion.
Never keep money on centralized exchanges:
Keeping money there is dangerous thing to do. Exchange hacks and insider thefts could lead to losing whatever you got there. Remember that money you keep there is actually not the money you control, and that while signing up you already agreed you can't do anything about if you lose your money there for whatever reason. Me I'm gone through the hell of Bter and Bitsramp hacks though both hacking events ended happily for me because I was reimbursed, still you cannot count on it, no way. It was pure luck. So setting up your own wallet is crucial. It can be cumbersome sometimes especially when wallets are buggy, but it's well worth the effort.Contrary to centralized exchanges, I can advise for usage of decentralized (P2P) cryptocurrency exchanges:
Openledger Bitshares is one slick fast and secure system for trading. Client-side execution in browser while not sending your coins or private keys anywhere makes it a safest solution if you want to have long-lasting active orders which will execute in the case of market moving in right direction. Along with BTS and various Bitshares based tokens, pegged assets are available for trading: BTC, USD, EUR, GBP, gold, etc... A little bit of a problem is relatively low volume of trade when comapared to centralized exchanges, but that is not much of a problem if you place your order not wanting to sell or buy bigger amount immediately. There are other P2P cryptocurrency trading platforms out there, but Bitshares is the biggest and fastest of them all, to my best knowing.Use Linux operating system:
Various types of malware (keyloggers, trojans, viruses...) are the plague of Windows operating system. Even Apple OS X has considerable amount of malware raging around. Whatever you do to protect youself with various antivirus scanners, practising good beahvour, danger of infection and your wallets emptied is great while using these two operating systems. Linux, in the other hand, has uncomparably lower number of malware. Updates to kernel, drivers and installed programs are done with just one or two commands from console, or from GUI. Such kind of updating your system will never be available in Windows or OS X. Installing Linux for the first time will make you discover a whole new wonderful world. Once I installed it around 5 years ago and made effort to switch to it, I never looked back, nor I intend to. Pick some well known distribution like Ubuntu or Kubuntu is, because it matters how much of online support you can get when you run into problems. And you will run into, but that should not stop you from setting it up so you feel comfortable.Surf The Hype
If you're into investments just for the money (not the ideals ;), then you can just "surf the hype". Booming cryptocurrency industry makes wonders: almost anything even remotely useful that you invest to is making a profit. Still, after the first usual price bubble which occurs when some crypto has been initially made available for online trading, price crashes, trade volume diminishes and graph is going sideways for some time. Depending on quality of the project you may wait for another bubble for prettly long. Partially selling it while it is climbing making your ROI (return of investment) like 5 or 10 or 20x is great. Don't be greedy and wait for 100x returns: yes it happened several times, but you usually fail when you wait too much. It's better to reinvest your profits in some fresh project. Remember to put aside some meaningful sum for hedonism purposes. ;)Never sell with a loss:
In booming crypto market, even a dead coin is alive in some sense. Maybe someone picks up and continues development? Whenever I sold with a loss, and it happened few times - I regretted it. You're in red? Forget about it. Wait. HODL. You will probably be in green sooner or later if there's any value and utility on what you have invested. Booming crypto market will definitely last for few more years, because this industry is not even remotely big as it should be. Amount of disruption it brings in online computing and finances is unprecedented. 120 bn USD market cap of all cryptocurrencies is nothing but a laughable sum when you know just that one corporation, namely Apple, is 5x bigger. And cryptocurrencies market's going to be 10x bigger than that... Soon. So 50x rise in few years is totally plausible scenario.Invest only what you can afford to lose:
You probably already know this one. Investing is just smarter form of gambling. Don't make any possibility that you ruin your life financially because of wrong investments. Taking loans is a big no-no. Leveraged trading is also a big no-no, unless you have some relable insider information.Do not day-trade:
TA (Technical Analysis) that is usually used when people try to day-trade is more of a pseudo-science than science, especially in wild cryptocurrencies market. It's in a sense a self-fulfilled prophecy that may work good in huge traditional markets like USD/EUR or USD/Gold. And it works better there because majority is using it. Not saying there is not some connection between math applied to price movement, psychology of masses and market sentiment, but to master it you have to put great deal of effort: read the news, watch the graphs 24 hours/day which is stressful and usually leads to losses, at least in my case. Yes I tried it and concluded that business is for very special kind of people. It's better to invest early in promising carefully picked projects and sell it with 10x ROI one year later and re-invest.Ledger Nano S and backups
What a piece of pure fetish hardware it is. You can keep most of the important coins on it (Bitcoin, Ethereum (along with every ERC-20 token out there), Litecoin... etc). Monero support coming soon. Your private keys never leave the device, all you have to know is your PIN for spending. Quality product done well. Backup your private keys and passwords for sites (and ledger seed phrase) to 2 or 3 USBs, storing them on secure separate locations. Make copies of the same file 2 or 3 times per USB. Pack it all with strong RAR password. Do not keep your private keys on machine which is online if you don't have to. Do not write your passwords/mnemonic seeds on papers which you can easily lose. Use decent password managing program like KeePass is.Sidelining:
If you're investing in some already launched crypto, the you should buy it when marketprice is not moving a lot in either direction, for some time. Zoom out the graph and analyze it. It's called sidelining, and buying in that phase is accumulation. This article is essential for correctly timing the market.Do your own research:
30 minutes of research should be enough when making a decision whether to invest or not. Do not rely on hype you see around. Reading comments may be more useful than reading articles/announcements/news. There are just few questions you should ask youself: Is the project meaningful? is there any utility to it? Is the demand sufficient? Who are the people involved (any background, previous projects)? What are the technical aspects? How many coins are emitted in ICO, how much they reserve for team for what purposes. Or is there any mining, how it's done? Take a closer look to numbers, they should make sense. Gnosis project is perfect example of everything seemingly looking good, but the numbers involved in ICO are crafted just for getting-rich-quick for the crew. Many people who invested to it haven't been looking closely enough and they realised how unfair that ICO was when it was too late. Remeber, you do all these things above, after you examined who registered a website domain for respective project. If the registrant is hidden, look no further. If registrant is seemingly a person that exist, try to verify it. Yes, you may make money even with crap/scammy projects used as your investment vehicle, but it's risky.
There are many details here I could write about, but these are some basic tips for survival in cryptocurrency jungle.
Generally speaking... Тhere is no way services relying on blockchain technologies won't become mainstream in the future. Better than old web/computing/finance technologies, because some important things are solved on technical level:
- Decentralization meaning less interference/censorship from the state.
- Middle-men made obsolete - less/no fees involved.
- Transparency of decentralized program execution / open source: meaning you're sure some online service is working honestly and properly.
- Anonymity - sometimes of a crucial importance, especially when it comes to blockchains applied to currencies. Saying hello to Monero community right now.
Web 3.0 works so much better than 2.0 and consumers naturally gravitate toward it, forcing businesses to adapt to new rules of global IT game if they want to survive and strive. I believe even some state structures are deeply involved into blockchain tech because they realised what's inevitable, so it's too late for any serious fight against such a disruptive technology. What this financial and economy revolution will bring is more equality among people because we're dealing here with plenty of healthy market practices which are putting consumer and not the business owner in the first plane.