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How to avoid/ tips to avoid getting scammed

By
Team Kryptoskatt
On
02-03-2022

Study blockchain, projects and the use of the crypto

Research different projects and what they are doing/trying to achieve. Is there a need for the blockchain or is it just a buzzword to make people invest in the project? Same goes for a token/cryptocurrency.

To see if a project is active and worth it, investigate. Take a look at their github and see if there is work being done and how many developers are working on the project.

Do they even have a GitHub and work as an open source project?

How long has the project been around?

Who is part of the team? 

Famous developers, traders, influencers, scammers?

Transparency is important.


Study supply and demand

Don't buy random cryptocurrency/okens based on price, this will give you a false impression that this token is cheap. Instead, look at the supply, how much of the cryptocurrency is in circulation? And is there a token limit?


Long term thinking

When I invest in something, I always think long term. This will keep my mind off the short

term events that can scare you and make you sell off your investments. This is not a good

strategy and it will stress you out, and ultimately lose money, FOMO (Fear of Missing

Out). If a token is going up in value fast just try to stay calm and try to avoid FOMO, as it is

not a good strategy and will most probably make you lose money in the long run.


Fundamental analysis

Study chain data and macro analysis on what is happening in the market. Gather the right

information to make rational decisions about what position to take.

Have in mind that no models are perfect. Models are only ways to interpret and understand

where things can go in time.


Wallets, hot wallets and cold storage.

Securing your crypto is one of the most important things you can do if you don’t want it to

be hacked or stolen. When you buy cryptocurrency from a third-party platform, for example

Kraken or Coinbase, you should remove your cryptocurrency from that exchange and put it in a cold storage for safekeeping. 

There is a famous phrase that goes: Not your key, not your Bitcoin (crypto). Only use a small amount of your cryptocurrency on an exchange or a hot wallet, like https://coldcard.com/ or https://www.ledger.com/.


Risk Analysis and Risk Management

Do not invest more than you can afford to lose, and study portfolio management.


Influencers and youtubers.

I stay away from influencers and youtubers that promote trading. A lot of influencers in the crypto market may promote some form of trading, especially leverage trading. This is a big red flag, as these influencers and youtubers are getting promoted by these platforms, earning money from it. It’s their job, and it gives a false impression that they themselves became rich by trading.

Pumping bags is a term that is usually used in the crypto space. This essentially means that influencers promote a certain crypto, that they (often) are invested in themselves, and attempt to make money from by pumping up the price. This is a common trap and creates the so called FOMO (fear of missing out) feeling. Just because an influencer is invested in a certain token does not mean that one should invest in it, especially for someone who is new to crypto. 

I try to stay away from all of this. If they do not offer any kind of educational tips or knowledge, I consider it a waste of time. I have fallen for these kinds of scams before myself and lost money, and I have noticed it takes some time to avoid these type of people in the industry.




Pages to look at to stay updated about news and announcements:

https://decrypt.co/ 

https://stacker.news/ 

https://blog.bitmex.com/?lang=en_us

https://www.investopedia.com



Books to read to learn more:

The Bitcoin Standard by Saifedean Ammous.

The Fiat Standard by Saifedean Ammous.

The Internet of Money by Andreas M Antonopoulos.

Mastering Bitcoin by Andreas M Antonopoulos.


(The above information references an opinion and is for information purposes only. It is not intended to be investment, financial, tax, or legal advice. Seek a duly licensed professional before taking any actions based upon this information.)