Sponsored How to stay safe and avoid scams in the crypto world
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How to stay safe and avoid scams in the crypto world

Easy Crypto explains how to spot a scam in the crypto world. Photo: Getty
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Once you’ve made a start with cryptocurrency it’s important to know how to stay safe and avoid scams in the crypto world.

The beauty of crypto is you can choose to be the custodian of your own assets, without any intermediaries.

This is a great feature but comes with some personal responsibility as there is no central authority that can help you out if you lower your guard.

Security, vigilance and scepticism are your best friends when it comes to crypto and the following tips will help you towards a smooth and enjoyable crypto experience.

To begin with, let’s learn how to spot a scam.

As with any financial product, if it seems too good to be true, it usually is.

Crypto functions on market principles, meaning when you purchase, you are predicting that the demand will drive the price up and you can sell your holdings at a higher price down the track, just like stocks.

Let’s look at the most common scams out there

Brokers: Anyone in the crypto world who approaches you with guarantees you will make money or a return is usually a scam. This is particularly true if they say they can trade on your behalf.

MLMs: Multi Level Marketing (or pyramid schemes) has seeped into the crypto world. They are no different to their non-crypto cousins. Avoid.

Job scams: Being offered a job moving crypto on behalf of someone else is a big red flag.

As mentioned earlier, a healthy dose of scepticism is needed when approached by third parties as with any product or industry.

Next, let’s look at securely storing your own crypto.

There are two ways you can store crypto, in the exchange, or in your own wallet. In both cases the best advice is to start with a very strong password that only you have access to.

Secondly, two-factor authentication is a must, meaning you require a password and another factor such as a text to your mobile to confirm a log in.

If you are using your own wallet, there are extra precautions required, namely backing up your wallet.

When you create your wallet, you will need to write down a back-up phrase (usually 12-24 words) that allows you to recover your wallet if there are any issues with your device such as it being lost or stolen.

Lastly, any device you store or access your crypto with needs to be secure.

Start with strong passwords or codes to log in with, and ensure an antivirus is installed.

Follow the above tips and you are well on your way to starting your self-sufficient crypto journey!

The easiest and fastest way to get started is with Easy Crypto; the go-to exchange for beginners.