Welcome to my laws of crypto. Hello all friends – greetings to you from around the world. We are involved in cryptocurrency which is exciting and allows personal freedom and financial independence. However there are some things we need to remember when dealing and trading in cryptos. I give these a title of “The Laws of Crypto”. Experienced crypto guys and girls will also tell you these things if they have time.
Today, I have time.
Introducing for you, the Laws of Crypto.
The Laws of Crypto are not legal laws – not government laws. Think of them as laws of the universe; laws of the jungle. Really they are advice for people to earn, collect, store and trade cryptos with acceptable risk and good chance of reward. Ultimately, learning by discovery is good but learning from the mistakes of other people is sometimes better and less painful. So let’s take a look at these laws and begin with the very basic number one lesson and law for us all.
Law of Crypto Number One:
Do your own research!
Success and longevity with any finances usually comes down to using good knowledge to make wise decisions. So it is important to have all the relevant facts needed to make informed decisions. Get the facts from any sources you choose. Use online forums, search engine (I suggest duckduckgo or another alternative), video sites (example: odysee or something else you like), trustpilot, online reviews and any other sources you may find.
The Purpose of the Laws of Crypto
The Laws of Crypto are designed to help protect your investments of time and money. Without these fundamental laws a crypto collector or trader can make mistakes and decisions based on inaccurate information and emotions. These laws will help you to avoid that.
Remember that many family and friends want you to be safe but probably cannot advise you about blockchains or custody wallets and crypto coins. Just say thank you for them and be kind. Your research must continue all the time.
Law of Crypto Number Two:
Hold your own private keys!
Nearly every crypto currency or blockchain uses two keys to access coins. A Public Key and a Private Key. For safety of your coins it is important to hold your own keys, especially Private Keys. That is why it is unsafe to keep coins in crypto exchanges for too long.
If you do not hold the keys, you really do not hold the coins. Store cryptos safely in your own wallet and make a secure copy of keys.
Law of Crypto Number Three:
Don’t Fall for the FOMO!
FOMO is anagram for “Fear Of Missing Out”. This means, be careful when reading hype in the news – it pushes up the price of coins. Sometimes, news programs will give exciting stories about a trendy crypto so everyone starts buying it. For an example: News person says everyone must buy yellow floppy sandals before the sandal factory closes, so ten million people go to store and buy yellow floppy sandals at a high price. Next day by surprise, news reader person says yellow sandals are ugly but it is too late – you already paid expensive price for ugly shoes due to the hype. You fell for the FOMO and now you have a pair of ugly shoes that you cannot sell.
Do your own research and never fall for the FOMO – “the fear of missing out”!!
Law of Crypto Number Four:
Buy low – Sell high!
This is really basic advice for people to buy and sell cryptos and other things to increase profit. Buy when the price is low and sell when the price is high. It is a fundamental principle but many of us become emotional about some coins and buy them at a bad time – when price is high. Example of this: when Bitcoin made peak a few years ago around $65,000USD – some people got excited and took mortgage on their house to buy Bitcoin. Big mistake!! They already missed the boat and fell for the hype and FOMO, and got left holding the baby when the price fell.
If you see the price of a crypto going to the moon, it is probably too late to buy it.
Wait for a day or a week. You will see price come down and THEN you can buy it. Buy when it is LOW and sell it when it is HIGH.
Law of Crypto Number Five:
Don’t Keep All Your Eggs in One Basket
Diversify your coins. Keep a bit of this and that, not all just one. The reason for this is to spread risk. For example: if you only have one crypto type, and price drops to zero or the whitepaper project dies, you may lose the value of your investment. However, if you spread investment across several coins, you reduce this risk as you will always have some coins that are “up”.
Keeping that in mind though, try not to spread yourself too thin. If you have so many different cryptos you may end up with tiny balances that can never grow much even when a coin moons. A reasonable mixture of 3-10 different cryptos is probably a good way to set up a portfolio that is diversified enough to privide stability yet has enough meat in each coin to take advantage of moonshots.
Find a balance between diversification and growth potential for each coin.
Summary of the Laws of Crypto
Cryptocurrency trading, earning and investment gives power to the people. Crypto collectors and traders have the chance to control their financial freedom and independence. The opportunities for rewards are limitless, but also are the risks. A person can reduce their exposure to risk by following the Laws of Crypto as detailed in this article. Here are the key takeaways:
- Do your own research!
- Hold your own private keys!
- Don’t Fall for the FOMO!
- Buy low – Sell high!
- Don’t Keep All Your Eggs in One Basket – Diversify!
Keep these Laws of Crypto in mind whenever earning, buying, selling, trading or investing in crypto and you will be better placed for success than if you ignore them. All the best!
