For many investors, it is not easy to find their way around the vastness of the crypto verification. There are numerous different currencies, a wide variety of providers and products and also to understand the blockchain technology themselves, is not easy for everyone. Nevertheless, there are some maxims where newcomers to crypto can hang along well in order to keep the most important thing in mind.
• “Be your own bank” – independence from banks and currency huts
• “Not your keys, not your coins” – only those who have the key have financial sovereignty
• “Do your own research” – form your own opinion through your own research and thus protect yourself from fraudsters
The cryptoversum has now established itself as a new investment option for numerous investors. Nevertheless, it is not so easy to find your way around different currencies, blockchains, crypto trends and technologies. In addition, the trade in cryptocurrencies also goes hand in hand with considerable risks, which you should always be aware of as an investor. The following three maxims should therefore serve as a guideline to find their way around the crypto verse.
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Bid 1: “Be your own bank”
We come to the first commandment of the crypto scene: “Be your own bank” or in German “be your own bank”. This means the basic idea of cryptocurrencies from the very beginning, namely that cyber devisens are decentrally designed and are therefore without a medium -sized person, i.e. without banks, but are also free of influence by states and central banks. The motivation behind it is clear. In the past, it has often occurred that entire financial crises were triggered by individual banks, which in turn had to be straightened again with money from taxpayers – without asking for permission. But not only can the taxpayer only indirectly decide on elections what the money is spent on, it is also not free to use the people of a country to use a different means of payment than the legal. The principle of your own bank is accordingly for breaking away from these constraints and giving everyone the opportunity to take responsibility for their own money. However, this does not happen without risk and is far from being as easy as crypto enthusiasts may want to paint. After all, many people who want to participate in cryptocurrencies are not about using a centralized crypto exchange, which remains the dependency of the investor on the third party institutions.
Second crypto wisdom: “Not your keys, not your coins”
What brings us directly to the second maxim of the crypto verse: “Not your keys, not your coins”. What is meant is that ultimately only the one has power over the crypto assets, which actually has the key to the crypto account. The following also applies here: If crypto brokers or trading places such as Coinbase & Co. are used to manage their own cryptocurrencies, they are also in fact these third -party providers who have the keys and thus responsibility. Against the background, repeating hacks of large crypto providers in which cryptocurrencies have already been stolen in billions of billions should be aware of investors of this risk if they emit the key to their own cyberdevisen. On the other hand, you have sluggled the key to the wallet itself, you can not blame anyone else. The absolute personal responsibility, which goes hand in hand with sovereignty over one’s own finances, is therefore not risky, because a key that has been lost once cannot be restored with external help.
Third Maxime: “Do Your Own Research”
A third widespread rule in the cryptoversum: “Do Your Own Research”, often abbreviated as a dyor, suggests crypto investors to carry out their own research before each investment. The background is that numerous new tokens saw the light of day with the first crypto boom 2017. However, not all of the “Initial Coin Offerings” were actually associated with real cryptocurrencies. So there were also enough fraudsters who got out of the dust with the money of the hopeful investors and let them lend them back. Even today there are still numerous scams that try to come with large promises from money from good faith investors. It is often not clear to uninformed investors whether they only exchange ideas in the community or see advertising from other users. In the crypto community there is the so-called shilling, with individuals promoting a coin in the hope of influencing the course of the currency positively. So you can’t avoid a deeper look into the currency for which you are interested.
Editor finance.net
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