Are you thinking about investing in a few masternodes? Afraid of losing $ or getting scammed?
Here are some essential rules to help you in your journey.
Rule #1: Only invest $ you can afford to lose
Seems too obvious? Good. How would you feel if you woke up tomorrow and all your crypto suddenly vanished? If you just saw your life flash before your eyes, think twice about investing in a new masternode project.
It helps to imagine all your crypto is already gone. That 2btc you have in your wallet right now? Poof, already gone. The less attached you are to the material value of crypto, the better the decisions you will make.
To win you must first accept you could lose it all.
Rule #2: Build your own crypto-scam detector
Let's face it, it's getting harder and harder to differentiate real projects from scams. Scammers have proven they are willing to invest serious time and money in order to deceive investors. They will hire third parties to design a website, a developer or two to code and write a whitepaper, and even produce fake videos / social media accounts.
There is only so much you can do to avoid these, but here are some pointers:
1) Do your own research and don't take anyone's word for it. We have a very strong social instinct that makes us believe others are either responsible for researching or have already done so. This is wrong. For any new project, YOU must be the one to check the information the team is providing.
2) Set your own rules. "I will not invest unless the team has revealed itself.", "I will not invest unless there is a demo / alpha of the platform", etc. Set your own exceptions. "I will invest in an anonymous project only if these other conditions are met."
Remember that just because a new project is remaining anonymous / missing development deadlines it does not mean it's a scam. Some developers are incredible coders but completely terrible at marketing.
Your strongest asset is going to be developing this crypto-scam detector gut feeling.
Rule #3: Don't panic, be aware of HYPE and FUD
Hype: Excitement.
FUD: Fear, Uncertainty, Death.
The value of a new coin is mostly determined by the 'HYPE / FUD ratio'. If HYPE > FUD, the price will wise. If HYPE < FUD, it will fall. It is not indicative of the actual progress and value of the project.
Be aware of how easily these can be manipulated to pump or tank the price. Two ways you will see this:
1) Someone or a small sub-community will time the selling of a large number of coins. Some of these new coins have 2-10BTC of daily volume. All it takes is 2BTC worth of coins to clear the top buy orders and cause panic. They usually time this during a slow week because they know new investors will not come fast enough for the price to recover. Herd mentality kicks in and other investors start selling because of FUD. Their end goal is usually to buy in at a cheaper price so they can do it again when the price has recovered.
2) Fake news. Unfounded rumors, false claims, more FUD. Always check your fundamentals - outside of all the FUD, has anything changed in the project to justify selling your coins?
The more visibility a project gets, the more negative press it will receive. Disgruntled investors, old enemies, the competition... it's completely natural and happens to even the most promising ones.
Your ability to hold during these predictable highs and lows is critical to your success.
Happy hunting!