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Here are 6 important things to consider before investing in cryptocurrency:
1. Conversion:
The first step in your crypto journey is to choose the right exchange. There is absolutely no shortage of options for this purpose. It is important that you make sure that the DYOR (crypto speak for your own research) and the exchange you choose to meet your investment needs, have a good reputation and a proven track record and above all - a secure custodian. Is.
There is no shortage of exchange hacks in the short lifetime of crypto. Take the infamous Bitfinex hack of 2016, which made headlines after a recently married couple; Liechtenstein, 34, and his wife, Heather Morgan, 31, have been arrested by federal authorities for seizing nearly $ 3.6 billion worth of stolen bitcoin. The story is so shocking that Netflix has announced a new series about a New York-based couple and their link to legalizing nearly 120,000 BTC related to crime.
These days - successful crypto exchanges have the most sophisticated security measures. For example, at OVEX, we use 100% cold storage. This means that user funds are not available in the 'cloud' - instead they are stored securely in offline hardware. Stealing from a Cold Wallet requires knowing the physical possessions of the Cold Wallet as well as the associated PIN or password used to access the funds locked inside.
It is also important to consider; Liquidity, Fees, History, Markets and Consumer Experience (UX):
1.1 Liquidity:
Liquidity affects everything on the exchange, from bid/offer to trade execution. In simple terms; Liquidity is the degree to which a property can be bought and sold quickly and at consistent prices. Nobel laureate economist Paul Krugman once said: "Liquidity for markets is the fuel for cars".
OVEX can help solve the monetary crisis for large volume traders. Trading positions that struggle with low liquidity for a given asset consume most of their order book from a single transaction. This means that the order will crawl the order book and pay a higher average price (or lower for merchants trying to sell). OVEX customers get peace of mind knowing that their orders can be filled instantly and at the same price (ZERO slippage).
1.2 Fee:
Most centralized exchanges pay maker and taker fees. The Maker and Taker model is a way of distinguishing fees between liquidity (maker orders) and trade orders that provide liquidity (taker orders). For example; If you place a purchase order for the same price or at a higher price than any pending sale orders - and it is filled immediately - your purchase order will be considered a take order. If it is filled, you will be charged a taker fee.
This fee is usually higher than the maker fee (because you are taking liquidity away from the exchange). On the other hand; If your purchase order is not filled against an order already in the book it is considered a maker order - that is, it adds liquidity. You will be charged a manufacturer fee when it is finally filled out. Be sure to check the exchange fee structure of your choice. For example, OVEX does not pay any maker / taker fees (zero fee).
1.3 History:
Does your chosen exchange have a proven track record and a thriving community?
1.4 Santa:
How many trading pairs are available on your chosen exchange? If you are going to diversify your crypto portfolio, you need a healthy choice. For example, OVEX has over 60 different business pairs to choose from.
1.5 UX:
How easy is it for you to buy and sell cryptocurrencies on your chosen exchange? The magic 3 click rule applies here. If you can not execute buy/sell orders in less than 3 clicks - look elsewhere.
2. Team
Now that you're ready to invest in the next big crypto project - it's important to ask yourself a few questions before getting into it.
Cryptocurrency must have an official website. It's already red flag if wrong. Here you will find important information about the project white paper and the project team.
First, read the project's white paper and find out:
- What does the project do? (And how does it do that?)
- Why do you need this project?
- Why does the project need a blockchain?
- An idea in epic proportions by the non-champion team #NGMI (Google It).
- Important team players include project developers and investors.
Ask yourself:
Do the developers have blockchain experience and how does this experience relate to the project?
Is the project supported by reputable investors with crypto credibility?
3. Products
Many projects on a single white paper have generated insane publicity and ridiculous growth. Many of these have failed.
Check if the blockchain actually has a live product. Is it possible to experience it - to play with it, to explore its features, to observe transactions in the blockchain? Ethereum, for example, supports the ERC-20 and ERC-721 token standards. Through Etherscan, customers can find top tokens, their contracts, trading volume, price changes, market cap and number of holders for each standard.
To determine how many iterations of the project have taken place - it is important that you find out how active the repository is on GitHub. Here you will find all the updates you have made to open source software.
4. Community
If the project leadership and development team looks good, it's time to start looking at the opinions of others. Obviously, you deserve your own perspective, but evaluating the perspectives of others reveals the strengths and weaknesses of a project that you have not yet considered.
Showing projects with active communities beyond the project by the encryption internal team. There are many platforms on which crypto enthusiasts can communicate. These include Reddit, Discard and Telegram.
For example, OVEX has a telegram channel where members of our community can connect to each other on all things OVEX + crypto. Join the fun here.
5. Token Economics
Tokenomics refers to the science of the token economy behind the crypto project. It covers all aspects of coin creation, maintenance and removal from the network.
Blockchain technology allows projects to be transformed into a micro-economy. To become self-sufficient, they need to figure out how tokens work in this economy.
Important metrics to check:
- Total Supply: Tokens "burned" minus the number of tokens generated
- Maximum supply: Indicates the total token amount that exists forever. For example, Bitcoin has a maximum supply of 21 million, while Ether has no maximum supply.
- Circulating supply: importantly, it affects the market capitalization of tokens
- Market Cap: Number of Tokens / Circulating Supply of Tokens * Current Value Per Token
Use ether scan, BCS can or any other block explorer to find out how tokens are assigned. Be wary of projects where wallets account for a significant percentage of the total supply. This increases the risk that whales will immediately drop their coins on the market.
6. Policy for investment
Traditional buy-and-hold investors are concerned with the long-term performance of the crypto project. Day traders on the other hand want to take advantage of opportunities to make instant profits.
Markets fluctuate day by day, hour by hour, and even by the minute. But any crypto or really any kind of investment worth its weight in gold is a long-term bet. If you want a dopamine hit, go for a run, watch an action movie, and swim to Robben Island if necessary. Leave day trading to professionals.
The best way to invest and avoid getting overwhelmed? The dollar price average (DCA). You withdraw any cryptocurrency you purchase and purchase a set dollar (or rand) amount at regular intervals - and then wait. If you have a long-term perspective, you should not panic about your position based on short-term movements.
You can also earn passive income on your crypto holdings today. For example, OVEX offers crypto interest accounts, where you can get yields on your inactive crypto.
Please visit: Russia V/S Ukraine : Effect of War On Cryptocurrency
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