10 Ways How Cryptocurrency Could Make You Bankrupt
Cryptocurrencies are currently popular, with many people seeking the next big investment opportunity.
I have been involved in this industry since 2014 and have witnessed both success and failure. While I have personally made a significant profit, I have also seen many of my original cryptocurrency colleagues lose substantial amounts of money in various ways.
It's an opportune moment to discuss the ten ways in which you could potentially lose your life savings to cryptocurrencies!
1. Poor-quality exchange
Pro tip: As a beginner, use only Coinbase and Binance.
2. Not Using Offline 2FA
For enhanced security, it's recommended to avoid using SMS verification and switch to app authentication instead. The Tofu app[4] is a good option. It's not advisable to use Google Authenticator as it's linked to your Gmail account, which could be compromised. Do not use Authy, which is linked to your phone number and could be compromised. Additionally, enable whitelisting and address books on all platforms.
3. Losing your private key
To ensure the safety of your private key and recovery code, store them in a secure, offline, password-protected device. It's recommended to keep at least two copies in different locations to avoid any loss of funds. If you choose to write them down, be extra cautious and verify the accuracy of the information. Never copy and paste your private key in its entirety, especially if you have a universal clipboard.
4. Sending money to the wrong address
A useful tip is to always send a small test transaction of $1 before sending larger sums of money, even if the fee is high. It's important to wait until the test trade is complete before sending the full amount. When signing up for a new exchange, it's recommended to send test trades both in and out to ensure that you can withdraw your funds without any issues.
5. Enter MemeCoins
It's important to understand that buying is not an investment. It's important to understand that buying low-value or unproven cryptocurrencies is not an investment, but rather a form of gambling. It's possible to lose all of your investment in such cases. If you are not comfortable with this level of risk, it's advisable to avoid such purchases.
6. Trade
When trading, it's important to be aware that low-volume pairs are a PVP, which puts you at a disadvantage. It's worth noting that students from prestigious universities such as Stanford and MIT use advanced blockchain investigative tools and AI-powered trading bots that run at lightning speeds. They have full visibility into the market, supply and demand metrics, and are actively seeking to outperform newcomers like you. Therefore, it's important to be cautious when trading and to seek advice from experienced professionals. Are you actively trading against VERY EXCHANGE?
So, avoid trading.
7. Taxes
Minimize your trades and report all transactions at the end of the year. Utilize tools such as Bitcoin.tax[24] to track and optimize your taxes. Remember, reporting losses can save you money! If you are in the US, it's important to avoid angering the IRS.
8. MetaMask Spoofing
A helpful tip is to never access platforms or exchanges through Google links. It's recommended to bookmark the website and use a separate browser for cryptocurrency, such as Brave. Avoid adding random extensions to your crypto browser. Always check the URL of the website and read the transaction before signing it.
9. Exceptionally excellent
It's advisable to be cautious of investment opportunities that offer more than 10% interest as they may be fraudulent. Additionally, it's important to be aware of obscure concepts such as impermanent loss which can result in financial loss. It's recommended to avoid such investments.
10. Death
Some companies offer services for planning your crypto assets. Alternatively, you may need to include your wallet key in your will. However, it's important to keep this information confidential and not share it with anyone who is not a trusted family member. Consider storing information in a secure location such as a safe deposit box. Provide your family with a physical storage device that is encrypted and include the password in your will.
