The risks of your crypto journey

Introduction

We all know the stories of guys who became crypto millionaires. Unfortunately, we hear much less often the stories of people who have lost their money on their crypto journey. It is of course much nicer to say that you have made a lot of money with it instead of that you have lost a lot of money with it. But because I want to take you through my (painful) crypto journey, I will tell you everything that happened to me. Unfortunately this is a long list. Had these not occurred and I had had more help with my journey, I might have been a millionaire by now. Unfortunately that is not the case...

Tips and advice

If you don't want to read all the dangers and go straight to how I could have prevented them? Then go straight to the Tips and Advice!

01

Hackers

02

Bankruptcies

03

Passwords

04

Scams

05

Exchange rate fluctuations

Your health

Tips and advice

Hacker dangers on your crypto journey

Unfortunately, danger lurks everywhere. Because where you can make money relatively quickly and can easily be scammed, there will always be people who will take advantage of this. The fact is that you will always be at least one step behind someone who is going to try to scam you. When you delve further into the world of cryptos, you will also find yourself in a more specialized field. Area that is completely new to you, but is child's play for those who want to make money from you. So realize that when you take a step further in your crypto journey, those who are one step ahead of you are a lot more specialist! Some things that happened to me:

- Phishing

-Wrong transactions

-Fake projects

-Password takeover

-Takeover of authority from my wallet

-Other people who were hacked causing me to lose my money

These are all things that can happen to you. I have also had the misfortune a number of times when major crypto parties were hacked, meaning that my tokens on their blockchain were no longer worth anything. Here are some tips to prevent this as much as possible:

-Never share your password.

-Look carefully at the website URL.

-Always read more than one source.

-If you don't trust a transaction, don't make it.

-Never just click on a link via a forum.

There is of course always a risk that a transaction will not go well or that you will be scammed somewhere, but if you have looked at these points then the chance is a lot smaller!

Bankruptcies in the crypto industry

Companies are also going bankrupt in the world of cryptos. Unfortunately, this can mean that if you have your cryptos somewhere and this company goes bankrupt, you will lose your cryptos. This is of course a huge shame and something you want to avoid! Therefore, always do your research first before you do business with a party. Since I have been working for a number of years, I have found a number of reliable parties (in my opinion and therefore not financial advice). I have been using the services of these parties for quite some time. What I also do is that I spread my cryptos across multiple parties. This is to ensure that if one party goes bankrupt, I do not immediately lose all my cryptos! Under the heading "support me" there are links where I share the parties with which I have had good experiences. If you create an account via one of these links, I will receive a small compensation. You would help me a lot with this! This allows me to continue researching and publishing this information!

In addition to carefully selecting a reliable party, there is of course another option:

Keep your tokens under your own control.

You can think of a product such as a Ledger. With these keys, you are the only one who can physically access your cryptos! However, you have to be able to deal with this. Because if you lose your password, you also lose your cryptos. Let that be a nice bridge for the next risk.

Passwords and security of your crypto accounts

Just like with all other online platforms, you also have to deal with passwords in the crypto world. But in addition to passwords, there are also additional options. Having cryptos makes you attractive to hackers and scammers. It is possible to enable 2FA on every platform. This means that you can not only log in with your password, but you can also use a different one

code before you can access your account. This can be done with an email, text message or with a Google authenticator. If you go one step further and not only use a centralized platform such as Bitvavo, Blox or Coinmerce, you can create a "defi wallet". If you have a defi wallet or you place your cryptos on, for example, a Ledger, you will have to deal with a "seed phrase". If you have a defi wallet or a custodial wallet such as a Ledger, this simply means that you now have your You have your own bank. YOU manage your cryptos yourself and only YOU are responsible for this. This also means that YOU are the only one who has the password and can access his data when a wallet needs to be reinstalled. Here is a brief summary of the for and disadvantages of creating an account with a centralized party versus being "your own bank".

Forgot your password?

-Centralized party: You can often reset/recover this with the help of a helpdesk.

-Your cryptos under your own management: Big bad luck, have you lost your seed phrase and do you want to reinstall your wallet because, for example, your computer has broken down? You will NEVER access your cryptos again.

The platform goes bankrupt?

-Centralized party: There is a huge chance that you have lost your cryptos. You're probably a little pin

in a huge haystack of people with stabled cryptos. When a company goes bankrupt, a choice will be made as to which people will be paid first and which will be paid last. Unfortunately, the chance that you will be among the first will be extremely small.... Once these major players and investors have been paid, there is usually nothing left for the ordinary investor.

-Your cryptos under your own management: As long as you have your cryptos under your own management, there is nothing to worry about. If the platform on which you bought your cryptos and forwarded them to your own wallet goes bankrupt, you only have to find a new platform. So you are protected against this.

This shows that having a centralized party means that you have to be less responsible for your own data. This is not financial advice, but in my opinion it is wise to start with this. Always start with small amounts and only with money you can really afford to lose. It is NEVER without risk. If you are going to start with a centralized party, I have a number of tips here:

-Start setting up all possible security options right away.

-When you start buying cryptos, start easy and start with the biggest: Bitcoin.

-Don't go too fast with your purchases and start SMALL.

-Have patience.

-Don't look at the price too often. If you're looking at your phone all day, you're spending too much time on it. There is a good chance that it will make you sleep poorly.

If you keep your cryptos under your own management, the following tips:

-Share your seed phrase with NO ONE.

-When someone asks for your seed phrase, NEVER give it.

-Write down your seed phrase several times and do this on paper.

-Store your seed phrase in a safe place and in multiple places.

-For example, save your seed phrase for multiple people. But these people only know that it is important and that they do not have the full phrase. For example, consider that your best friend has the first part, your parents have the second part and you have the third part. This way, three people are always needed to reinstall your wallet. This protects yourself against the mistake of simply entering your seed phrase somewhere. But this way you are also protected against a robbery or when someone breaks into your house.

Once you have completed all these points, the chance that you will be scammed by a simple hacker is much smaller. So you are well on your way to a safe crypto journey! Now let's look at how you can be tempted by projects that seem too good to be true.

Scams in the world of crypto

I think this is the most common way of how other people get rich off your hard earned money. If you have read up on what is possible in the world of cryptos, you will often have come across how someone became a millionaire with an investment of 100 euros. Who wouldn't want this!? Now the problem is often that these are the people who have been working with cryptos for a long time. The gains made in the beginning are enormous. This is because the total amount of money in a crypto like Bitcoin was still very low. Here is a small calculation example:

When there are 1000 Bitcoins and there is a total of 100 euros in money in these Bitcoins. Then this means that each Bitcoin is worth 10 cents. Now suddenly 9 other people hear that Bitcoin is really going to be the future and they all also invest 100 euros. This means that there is now 1000 euros in Bitcoin. There are still only 1000 Bitcoins, so every Bitcoin is now suddenly worth 1 euro. This means that with an investment of 900 euros the value of 1 Bitcoin suddenly increases 10x!!! has become so big! Person 1 bought a Bitcoin when it was still worth 10 cents. So he now has a profit of 90 cents and his Bitcoin is now worth 1 euro, so his investment has increased by x 10. Person 2 was the last to put in money and bought his Bitcoin for 1 euro. So he has no profits or losses yet.

Bitcoin then becomes even more popular and another 9,000 euros are invested. There is now a total of 10,000 euros in Bitcoin, which means that each Bitcoin is worth 10 euros!

Person 1: Bought for 10 cents per Bitcoin and it is now worth 10 euros. A win of 100x his stake!

Person 2: Bought for 1 euro per Bitcoin and it is now worth 10 euros. A profit of 10x his stake!

Person 3: Sold his Bitcoin for 10 euros each and has no profit or loss.

This example is to indicate that someone who got into cryptos very early (and therefore ran much more risk) experiences a much larger increase in value compared to their investment than someone who got in later. It is therefore not fair to compare yourself with these people. What is a problem is that there are plenty of people who want to promise you the same thing. Become enormously rich with a small investment. When we hear about this in the news, we almost all think the same: How can anyone fall for this because it is too good to be true! But these groups of people are much trickier than you think. Because let's be honest, it would be great if you could really become a millionaire with 100 euros and be freed from all your worries!

Now here's my advice: If you think something is too good to be true, it often is. Getting rich quickly often means getting poor quickly. If you just get something, you often lose it because you don't see the value in it. It is also often the case that when you are promised something that is too good to be true. Unfortunately, it is good for the person who sells you the story. In the world of cryptos, your money can easily disappear or be siphoned away and if you transfer the money yourself, you are out of luck and simply lose it. Many projects fall outside the supervision of the AFM. Here are some tips to unmask a scam:

-Pay attention to high returns promised as a fixed return.

-Look for a combination of high returns and a freely withdrawable deposit.

-Check how old the project is.

-How did you get this information? If this is via YouTube or Facebook, for example: BEWARE.

-What does the website look like?

-Google the project.

-Google the people behind the project.

Often you can go through this list and get a red flag for one of these options. There are projects where you can make enormous profits. But you can only access this if you are really familiar with cryptos and blockchain technology. It is also true that when you have a chance of making a huge profit, the risk is also enormous! Once again, everything depends on informing yourself. When you know more than the average person. This means that you often outsmart the average scammer or hacker because they target an average person.

Price fluctuations of the cryptos

Just like with shares, you will have to deal with price fluctuations with cryptos. It is also good to realize that price fluctuations in cryptos are a lot more intense than in shares. While a share varies in value on average by about 10% per year, this can easily be as much as 100% for cryptos. This is of course fun when you make a profit, but it is also quite painful when you make a loss. You have a certain investment strategy for price fluctuations. DCA also calls this Dollar Cost Average. I will discuss this way of investing in "The possibilities within your crypto journey". What is especially important is that if you have never done anything with shares or other investments, you really have to get used to this. It's super cool to see your cryptos becoming more valuable. But when you see that you are making a loss, this can be very painful. Especially if you're just starting out! Here are some tips for dealing with price fluctuations:

-Start with small amounts. If you get nervous when you lose too much, you have risked too much.

-Start with the major cryptos. In the beginning, only think about Bitcoin and once you get used to it, look at Etherium and so on. A good tip is that you look at websites like "coinmarketcap" or "coingecko". Here you can work from top to bottom. Start big and go down slowly. There is no need to start working with small cryptos. There are already enough possibilities and enough risks with the big boys like Bitcoin!

-Learn what "Fear and Greed" is. Also called "fear and greed" in Dutch.

-Read up on the price development of Bitcoin.

-Look at YouTube channels, for example: Doopiecash, Blox and Madelon Vos.

-Read up on the technical analysis of the price of the crypto you want to invest your money in.

-You can look at the course that Madelon Vos has on her website: Technical analysis. This is of course not financial advice. When you register via my link you will receive a free Masterclass, trial course or trial period from the "Money Tallks" community! If you think this is something for you and you purchase a membership or a course, I will receive a commission for this. From this committee, I ultimately want to set up my own community that helps everyone who is on their crypto journey! Does this seem interesting to you? Then sign up for the newsletter and you are sure to be the first to know!

-Do not look at the price all day (unless you are going to "trade"). If you are making a purchase for the longer term, then there is no point in looking at the price of that crypto 10 times every day. What you can do is, for example, delete your app from your phone after your purchase, which makes it a lot higher to watch again.

Once you have read all these tips, the chance that you will lie awake in the evening will be much smaller!

Your health during your crypto journey

If there's one thing I've learned in recent years, it's that working with cryptos can be extremely stressful. It is about the money you have worked hard for and there is so much to read about it that you can really lose yourself in it. So keep in mind that you don't forget to take care of yourself too! Here are some things I've encountered:

-Wanting to read too much.

-Trading with excessive amounts.

- Wanting to understand everything immediately.

-Sitting too much on the laptop and not moving enough.

-Eat less healthy and opt for a quick meal quickly.

-Working on crypto all day long.

All these things will eventually work against you. From sleeping worse to having an argument with your partner. Unfortunately, it was all part of it. My advice is to pay close attention to yourself! It doesn't benefit anyone if you become the new crypto expert but your health is so poor that you can no longer enjoy it!

Tips and advice for your crypto journey

Now that you've read all about the points I wish I had gotten in advance when I started my own crypto journey, it's time for the tips. All tips are listed here so that you can read them regularly. If you have a good tip or have missed something regarding dangers/risks, I would love to hear from you! Send me your danger/risk and I will take a good look at it! It might also be nice to share your danger/risk/tip with other readers! You can respond below and perhaps others can learn from your mistakes/tips!