The cryptocurrency industry can be extremely lucrative. In their lust for profits, people easily forget that this is still a young industry. And in every young industry there are risks and scammers. The crypto scene still lacks simplicity and transparency which can be scary for new investors entering the industry. We outlined a few mistakes that you should avoid in crypto.
Sending funds to wrong address
Unfortunately, many newcomers to crypto don’t do their due diligence of research. The most important thing to learn before buying crypto is studying wallets. There are wallets that are not compatible with certain types of crypto wallets. For example, one cannot send Polkadot to a MetaMask wallet because MetaMask is not configured for Polkadot. If a person accidentally sends their crypto to an invalid address, they could potentially lose it. In most cases this is a problem that can be solved, however, there are instances where the funds are irretrievable. When trading crypto, it’s very important you double check when sending tokens another address. There is no institution in crypto that reimburses them when they lose their tokens.
Avoid scammers by following this important step
A fruther crucial mistake is to fall for scams. There are still a lot of scammers in several areas in crypto. A new method which many scammers use is sending a message on Telegram or WhatsApp that contains a virus which breaches the security of individuals wallets on their phones or laptop. Often this is easily protected through having a wallet with two-factor authentication. This way you’ll be alerted if anyone breaches your account’s password or seedphrase. It’s another step in security which makes it very difficult for scammers to get past. One flaw with MetaMask is that the application does not have a two-factor authentication (2FA) feature as it should. To best protect your crypto, it is highly in their interest to choose a wallet which has 2FA. Otherwise, your wallets are much more susceptible to being hacked.
Other scams to be aware of:
- Never send your crypto to someone who you do not know or who might be impersonating a celebrity. It has been revealed for. example that Elon Musk impersonators have made several million dollars with these kinds of scams.
- “Get rich quick” scams. If you have been in the crypto space for a while you will have surely been contacted by people who would promise you crazy returns. Usually, your first return will be good, so that you will invest more money, but then they will suddenly disappear. Be aware of these “get rich quick”-scams.
- Fake IDOs. If. you decide to invest in an IDO, you need to make sure that the project is legit. Too often people invest into a project and the next day the website disappears and they disappeared with your money.
Be aware of impersonating projects
One of the easiest ways to be scammed in crypto is connecting one’s wallet to a fake version of a certain decentralized exchange. For example, there are many fake Pancakeswap websites which will prompt a person to connect their wallet. And once this is done, they will take the tokens out of the wallet faster than one would likely be able to counter them. It’s very easy to avoid this scam. All that needs to be done is to bookmark the correct exchange in your browser. A straight-forward way to verify whether it is the real website is to find it on the company’s Twitter page. Make sure there are many followers on the Twitter page and also that there are some influencers following it, so you know it’s not a fake Twitter page – which may also exist.
It can seem really scary to jump into the crypto game with all of these potential risks. One way to stay ahead of the game is to join reputable Telegram groups which are constantly educating their community about current trends in crypto. Also, you can stay on the bigger exchanges as they are much more safe and will be a lot easier to use. As long as you do your due diligence and are cautious, you will most likely stay out of harms way. There’s always that 1% chance that something could go wrong. However, in a young industry as crypto, there will always be some risks.
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Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.