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Top 7 Mistakes That Crypto Beginners Make

Posted on November 9th, 2022 by RockItCoin

At RockItCoin, we’re all about making sure our customers are educated and knowledgeable so that they are safe. Cryptocurrency is an industry where it’s especially important to know your stuff before making purchases, and it’s easy to make mistakes. If you’re just getting started in the crazy world of crypto, this article is for you!

Not Doing Research
Before buying into different crypto assets, make sure you understand the tech behind the coin! Not only is it interesting to learn about what makes a coin unique, but you may also learn valuable insights into the development behind it. Cryptocurrency isn’t always about the money, it’s also about the technology. With new crypto projects being launched all the time, it’s important to do your own research, or “DYOR” as the crypto community says. Doing just a little research may save you from buying into a scam!

FOMO
FOMO, or Fear Of Missing Out, is always a hot topic in the fast-moving world of crypto. As a beginner, you may watch the price of a coin spike within a short period of time. Thinking that it hasn’t peaked yet, you may buy in, in hopes of riding the hype all the way to the top and making large profits (looking at you DOGE). FOMOing into a rising coin is always a bad idea, as it is impossible to time the market. Do research, and don’t fall into the hype of people who may be trying to make money off you.

Only Invest What You Can Afford to Lose
The success of a given crypto coin is never guaranteed. While there are some cryptos that have been around for a while, like Bitcoin, Litecoin, and Ethereum, it doesn’t mean that their price isn’t volatile, as shown by this year’s bear market. When buying into cryptocurrencies, it’s important to never invest more than what you’d be comfortable with completely losing. This prevents you from being put into financial peril if a coin’s price drops significantly and you’re required to sell to pay for necessities.

Not Your Keys, Not Your Coins
This is a topic central to crypto – if you don’t have the keys to your wallet, you don’t truly own your crypto. Having the private key to your cryptocurrency wallet means that only you can access your funds. Many cryptocurrency exchanges do not provide their users with their private keys, meaning that the exchange effectively owns the crypto until it is moved into an owned wallet. This means that if the exchange closes down, like many have over the past 6 months, customers can completely lose access to their crypto. RockItCoin strives for customers to be the true owners of their funds by offering the RockItCoin app, in which users have access to their private keys. If you’d like to read more about this topic, check out our past blog, “Not Your Keys, Not Your Coins and how RockItCoin champions customer privacy.

Checking Prices Every 5 Minutes
Another common mistake that beginners make is constantly checking the price of the cryptos they’ve purchased. Of course, this depends on the strategy behind the purchase, but if you’re in it for the long-term, it may cause a lot of unwanted stress. The cryptocurrency market is not for the faint of heart, as prices can wildly fluctuate.

Double-Check Addresses
Two words we commonly use to describe cryptocurrency transactions are final and irreversible. It’s a good idea to always keep this in mind when sending cryptocurrency to another address. You want to make sure that 1) the address you’re sending to is correct and 2) it is for the correct cryptocurrency. If either of these factors are incorrect, it will result in a failed transaction or loss of funds altogether.

Beware of Scams!
Unfortunately, there are many people out there who want to make money off of uneducated crypto beginners. Fortunately, you’re reading this, so you’re prepared! Always beware of people posing as law enforcement, family members, military staff, and many more occupations. If you feel uncomfortable with their wants/demands, do not comply with them. Police will never ask for cryptocurrency as payment, and double check with family members to make sure they haven’t been hacked.