The digital dollar "in the clouds": tips to start buying without falling into scams or traps

With the rage of cryptocurrencies on the rise, it pays to know the best way to trade safely.

2020 was a period of consolidation for crypto assets. The currency reached a historical volume that exceeded, only in Localbitcoins (a platform that facilitates the exchange between individuals of Bitcoin (BTC) for local currency and Ethereum, XRP, and Litecoin), the US $ 2 million in the month of June. This demand generates a greater number of people who begin their trajectory in the world of crypto. In this context, more and more Argentines choose to invest in digital currencies. In addition, the cryptocurrency reached a price record; exceeding the US $ 40,000.

However, given the novelty and technical difficulties of trading these assets, new users can suffer from different types of scams. To invest in cryptocurrencies safely, a series of questions must be taken into account: what are the different wallets and exchanges available, what are cold wallets and why do experts recommend them, what is a seed phrase and what is the use of the two-step authentication. Finally, which are the most used exchanges in Argentina.

For example, the Paxul company; specializing in selling P2P cryptocurrencies, recommends:

Research the crypto economy before investing

Undoubtedly "knowledge is power" and that is why in the first instance it is essential to learn about this investment system. The more knowledge the user acquires about cryptocurrencies, the better they can understand the benefits of the digital economy in order to choose in which financial instrument it is best to invest in according to their objectives.

Do not get carried away by the market price

On many occasions, new users are carried away by the whirlwind of the market, buying cryptocurrencies when their price rises and selling when it falls for fear of an even more abrupt fall. That is why, when starting to operate with crypto, it is important to bear in mind that this type of investment should be considered in the medium-long term, avoiding being carried away by the price that the market sets on a day-to-day basis.

Use secure platforms

Another important aspect is related to the use of platforms that are accredited and that have solid support for users. Peer-to-peer platforms like Paxful can be used to transact, which securely connect buyers and sellers of cryptocurrencies. Among its main advantages is its guarantee deposit system that allows a secure exchange experience for both parties, guaranteeing that the money is released once all the terms of the transaction are met; the identification of identity and address of each user; the ability to view the reputation of other users operating on the platform; its 24-hour support service; and its risk management team dedicated to maintaining the security of the platform.

Start with small investments

It is recommended that those investors who are just starting out in the crypto economy, start operating with modest transactions that do not involve the disbursement of large amounts of money. Once the user becomes more experienced in the crypto sector, he will be able to increase his investments.

"Investing in cryptocurrencies is a great alternative for those users who seek to protect the value of their money, send money to their family and friends, and make payments on e-commerce platforms. It is essential to know that these types of investments are highly secure, as long as it operates on platforms that offer security guarantees for investors, such as Paxful, "concluded Magdiela Rivas, Paxful's Latin America Manager.

For his part, Andrés Burecovics, a lawyer specializing in inter-jurisdictional law and CEO of the consultancy B&P, points out that "there are several ways to save cryptocurrencies." "Those who speculate on the price may prefer to leave them in the same Exchange in which they were acquired and then sell them again when the price rises. But this convenience is associated with a greater risk. On the one hand, the risk regarding the security of the Exchange and potential attacks or theft, but on the other hand the regulatory risk. Unlike Bitcoin, an Exchange located in Argentine jurisdiction is regulated under Argentine regulations and therefore must obey the requirements of the authority. "" It is essential to understand that regarding the security of cryptocurrency transactions in general, by including intermediaries The potential weaknesses they may have then begin to be relevant. When you decide to have Bitcoin in an Exchange, the security of the intermediary that we choose to guard it is relevant, "he explains. In an Exchange, the intermediary has in his possession the private keys of the wallets of millions of users. For this reason, it is necessary to choose a safe one.

SatoshiTango, another of the country's cryptocurrency companies,  made a guide of recommendations for users to avoid scams and take care of their investments in cryptocurrencies. First, they recommend using passwords safe and be aware of phishing attacks: "In general, our emails or links to web pages disguised They ask for sensitive information such as user name or passwords. Not reply to any of these emails or fill out forms "They say from the platform. In addition, the importance of updating antivirus and avoiding pyramid scams is highlighted.