Security is an important factor when you are preparing to invest in any financial asset. Thus, if you are a cryptocurrency owner or about to acquire some crypto, it is very important to make a wise choice regarding these assets and be careful when making any transaction. In this article, we will tell you how to keep cryptocurrencies safe.
How Do People Lose Crypto Due to Mistakes?
One of the main reasons why people lose money in crypto is simple mistakes. This is actually quite common, so don’t get upset if you make a mistake. Still, by being aware of the various mistakes that can be made when conducting crypto transactions, you will be able to avoid them in the future.
Sending Cryptocurrency to a Token Contract
One of the common mistakes people make when converting BTC or ETH to another token through a contract is accidentally sending newly received tokens back to a token contract. In this case, all funds are lost forever, since fully decentralized token contracts are one-way.
The key to complete decentralization is that only you, a token holder, have access to your funds. The contracts are designed in such a way that even the token creators cannot access your assets. The advantage is that this helps keep your funds safe, but it also means that the developers of any fully decentralized project or token have no way to get your tokens back if you accidentally sent them to a contract by mistake.
Sending Cryptocurrency Through the Wrong Network
Another common mistake that people often make when sending cryptocurrencies is sending them through the wrong network. When sending cryptocurrency from one wallet to another, both wallets must be connected to the same network. Otherwise, the transaction will go through, but a receiving wallet may not receive the tokens.
A simple rule is to always choose a native network of a coin. For example, send BTC to a Bitcoin address via the Bitcoin network, send ETH and ERC-20 tokens to an Ethereum address via the Ethereum network, etc.
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Using Leverage
This is not a user error, such as sending cryptocurrency to a token contract or sending crypto through the wrong network. Using leverage to increase profits faster involves using borrowed funds to buy more cryptocurrencies.
You may have been attracted by people’s stories about how they got rich. Also, you may want to achieve financial freedom faster by investing more than you can afford with your current cash reserve. However, trading with leverage requires a margin, and if your trade doesn’t go the way you want, you could lose all your funds and end up in debt to whoever you borrowed from. This can create a debt trap that will be difficult to get out of. Thus, we recommend investing only the amount you can afford to lose and still pay your bills. Still, if you still decide to use leverage, just be careful.
Read Next: How to Invest in Cryptocurrency: Best Tips Every Beginner Should Know
Loss of Private Keys or Passwords
Cryptocurrency wallets require private keys, passwords, or two-factor authentication to log in or gain access to them. This information should NOT be known to anyone except you so that other people won’t be able to access your wallet and steal your cryptocurrency. Also, make sure to remember all your private keys or passwords so that not to lose access to your cryptocurrency.
What Is the Best Place to Buy Cryptocurrency?
If you’re wondering where to buy your first crypto, you should definitely think about doing it at Switchere. On our platform, you have an opportunity to buy all leading cryptocurrencies in the fastest and most convenient ways using any available payment method.
Switchere is one of the most reliable online exchanges for buying cryptocurrencies. The company is a licensed provider of financial services, with guaranteed legal compliance and a secure infrastructure system for fast crypto exchange services at fair prices.
Switchere is characterized by the fastest order processing and instant delivery — in fact, you get your ordered amount of crypto within minutes after making a payment. Moreover, we offer some surprising bonuses! Users of our platform enjoy a 0% service fee for the first order.
Conclusion
Security is definitely one of the most important factors when you are preparing to invest in any financial asset. We hope our article will help you avoid some of the mistakes that can lead to financial losses so that you maintain a positive experience in the cryptocurrency space.
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