Food For Thought

in bitcoin •  2 years ago

Here is something that should make you pause and think a little bit.

By being part of Steemit, you are at the forefront of the fintech revolution currently sweeping the planet. Dangers and opportunities abound.

Almost a decade later, this space is still, for the most part, a wild west. Some people, me included, thrive on that.
Less rules. Less regulation. Things happen fast.

Big risks, big rewards.
It is not for everyone.

Crypto and You

Perhaps you are a little bit saner and would rather minimize your risks, because your primary interest is not the technology or the philosophy, but simply making some bucks - hey, nothing wrong with that.

If you are that type of person, there is something that through my writings I have been trying to drill into your head.

I still hear too many horror stories, though. Almost every week -- another one who lost some bitcoins. Another one who parked half of their life savings in some now-defunct exchange. Another one who had a virus, and the bitcoins flew away like sanity on a hippie festival.

Take a moment to read this. Or just go with the tldr, if you prefer: 33% of all bitcoin exchanges that ever existed were hacked, and nearly half closed down.

Do you like those odds?

Solutions

Two basic angles here.

Number one, to reiterate, is that you should not be leaving crypto sitting in exchanges, unless you know what you are doing -- your number will be called, and you will regret it.

I learned this lesson early on - with losses over $2k in MtGox.

It is more convenient leaving the funds at the exchange, for sure: but that convenience WILL come back, eventually, to bite you in the ass when they get "hacked".


(disclaimer: I am in no way, shape or form, associated with Ledger -- just a happy user)

Number two is that you should invest in a bitcoin hardware wallet.

There are a few good choices, personally I recommend the Ledger Nano S -- but this is merely personal preference, the competition is also doing a good job.

Number three is diversifying, at all levels. Ask yourself these questions:

  • Do I only have Steem Dollars?
  • Do I only have Bitcoin?
  • Am I all in on crypto?
  • Do I own any gold or silver?

Keep in mind that while things appear to be moving along just fine, all of this is essentially one big epic experiment (which personally I believe and hope is here to stay).

Be wise and diversify your profits. Be smart and store them where they will be safe.

Tools

To accomplish the stated goal of reducing exposure to exchanges, there are two great tools at your disposal.

I have written about both before, and so will not reiterate everything here once again, a short description will suffice.

Bitshares

For the average steemit user, I believe the greatest benefit of #bitshares is twofold.

First, if you would rather hold any other fiat currency besides USD (not all of us believe in it), #bitshares makes this possible.

And even if you want to be exposed to USD - it may not be a bad idea to diversity a little bit away from Steem Dollars, altough you must keep in mind that bitUSD (the bitshares equivalent) does not pay any interest.

But it does not stop there! You can also get price exposure to gold and silver, for instance.

This means that you do not have to go all the way back and forth between crypto and the legacy banking system, while virtually guaranteeing that you have a fiat-denominated balance available at a whim.

Secondly, there are many (and increasing over time) investment opportunities that are available, sometimes exclusively, on the bitshares platform. If you aim to support and profit from such endeavors, you could do worse than familiarizing yourself with the software.

Bitsquare

With #bitsquare you are able to trade, without having to trust a third-party (exchange), much like #bitshares.

What sets it apart is that you can do the same using other payment methods -- in other words, you can sell your bitcoin and receive euros, dollars, etc on your bank account.

I have written a tutorial on how to do so, check the links section below.

Conclusions

You do not have to become a statistic.

There are tools available today that will assist you in preserving your digital wealth. There are behavior patterns that you can adopt to greatly decrease the odds of the worst coming to be.

You put in all the hard work, spent countless hours writing and curating, do you want to see it all go away because you failed to learn a few basics?

You owe it to yourself - do the work, learn a little bit more about how to keep your investment safe.

Links

Decentralized Trading Guide
| Part 1 | Part 2 | Part 3 | Part 4 |

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Thank you for this article. I am completely new to cryptocurrency and from South Africa and a little overwhelmed. I have invested my few earnings so far back into steempower, but want to experiment with actually receiving the money. (You never know, maybe an article of mine trends, haha)

A hardware Bitcoin wallet will not be an option for me at this stage, are there any software ones you could recommend?

What I gather so far is that I must convert my Steem or SBD on an exchange like poloniex or bittrex to Bitcoin. How do I then convert it to fiat currency, ZAR. (Which I find a little intimidating as I don't understand anything on the page!)

What is the difference between converting SBD or Steem?

I know that there must be a LOT of technically challenged people like me, and not knowing how to go about things could also be putting new users of Steemit off.

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Through the years I have definitely learned to diversify in crypto. Too many alts have crashed never to return again to hold a large % in any for long.

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This is why bitshares smartcoins are a boon -- for years I have been parking profits made from trading in fiat-denominated crypto-currency, rather than risking staying invested in bitcoin or an alt beyond the risk I was willing to take, and without needing to go back and forth between crypto and my bank account.

If you are not familiar with bitshares, I recommend you take a look!

Great article and thanks for sharing...