Showing posts with label Crypto. Show all posts
Showing posts with label Crypto. Show all posts

Tuesday, April 5, 2022

Do's and Don'ts of NFT Investing

Making money with NFTs has become a lucrative business for many opportunistic investors across the world. NFT investments can make you rich overnight, but your odds of success decrease substantially if you don't understand the do's and don'ts of NFT investing.

Below is a list of dos and don'ts you need to know before investing in non-fungible tokens (NFTs).

Do's for NFT Investments

1. Research extensively.

It is extremely important that you do proper research on every NFT project before buying. Researching on the NFT increases your odds of making a good ROI. Some of the things you should look into before investing in NFTs include:

  • NFT creator's social profiles and status
  • Community
  • Intellectual property/brand name
  • Contract terms (term dates, perks, and restrictions)
  • Past projects, accomplishments, and failures

2. Get involved in Crypto communities.

If you want NFTs to be a profitable investment, you need to engage with the NFT community. The community is your support group; you can ask questions to understand the market and if you have something knowledgeable, share it with them. Interacting with the community helps ignite new ideas and friendships.

3. Be a skeptic.

A healthy dose of skepticism can prevent you from being a victim of an NFT scam. If the offer is too good to be true, it may not be true at all. So, ask people, research online, and investigate to seek out the authenticity of the offer and the company making the offer.

4. Understand your risk appetite.

NFTs are relatively new, and their market is extremely volatile. Before investing in NFTs, understand the risks and go ahead with them only if you have the financial bandwidth and the appetite to withstand the risks.

Don'ts for NFT Investments

1. Don't invest in something you do not understand.

It's important that you fully understand the asset you are purchasing. To guide you with the purchase, ask these questions: is the value of NFT based on demand? Scarcity? Utility? What can you do with the tokens? Research before investing in NFTs.

2. Don't share your wallet password or secret phrase.

You need to be extremely cautious about your crypto wallet. Never ever reveal your password or secret phrase to anybody regardless of the situation. 

Anybody asking you to reveal this information is possibly a scammer. Your confidential details in the wrong hands put you and your digital assets at extreme risk.

3. Don't sell too early.

It might be tempting to sell your NFT when you get a reasonable offer for it. But, it might not be the right time to sell; if you sell it too early, you might lose an opportunity for it to grow to its potential worth. If you think the value of your NFT is much higher than what's being offered, listen to your gut and don't sell it.

4. Don't let greed cloud your judgment.

If you are greedy to make a quick buck with NFTs, you could be attracting deals that are too good to be true. Spammers love to target greedy people because they are quick to take a bite. 

Greed can also instigate you to make wrong decisions, making you lose all your hard-earned money. Avoid being greedy; do your research and always invest your money with good intentions, and don't forget to do your bit to give back to the community.

NFT Investing is a lucrative opportunity to make money, but it's extremely important that you understand what you are getting into before making NFT investments. Let the above do's, and don'ts be a guide to you in making informed investment plans and decisions.

Author Bio: Akanksha Malik is a content creator & digital strategist at Mesha - India's largest investing club & online community where the world's best investors gather to share ideas, discover fellow investors, invest in NFTs & crypto, and compete in challenges for real money. She develops content to share her knowledge and insights helping her readers stay updated with the latest in fintech & investments, as well as cryptocurrency trends and upcoming NFT opportunities. Apart from being passionate about her work, Akanksha loves exploring architectural sites and different local dishes during her travels.

Saturday, November 13, 2021

Can You Still Make Money Farming Cryptocurrency?

You may have heard or read about people making tons of money farming cryptocurrency and be considering it as an investment for a quick way to make lots of cash. 

The truth is that you still can make money farming cryptocurrency, but it's not an investment strategy for the timid or the beginner.

What is Farming Cryptocurrency?

Farming cryptocurrency, also known as cryptocurrency yield farming, is an investment strategy that offers higher returns than conventional investments. However, like most investment strategies, higher returns mean increased risks.

When you put many in the bank, you're lending money, which is why the bank pays you interest on the money you deposit. With yield farming, investors are lending cryptocurrency. 

Yield farming can earn double-digit interest rates, but the real payoff comes if the digital currency appreciates rapidly. The bottom line is that when you lend cryptocurrency, you're hoping the value of the digital currency appreciates quickly. 

If the market gets flooded with a new currency, the digital currency devaluates, and you lose money.

How Cryptocurrency Farming Works

Farming cryptocurrency works by lending digital coins or currency through DAI or Tether through a decentralized app such as Compound. 

Compound is an algorithmic, autonomous interest rate protocol made for developers to unlock various open financial applications.

Compound lends the digital currency to borrowers who then use the currency for speculation. The interest rate you receive will vary with demand, but each day you use the Compound service, you receive Comp coins, interest, and other fees. If the Comp coins you receive appreciate, your returns skyrocket as well.

What are the Risks?

One of the most significant risks involved in yield farming is increasing regulations by the SEC. In addition, theft is a growing trend in digital currency. 

When you lend digital currency, the money is held by software, which is vulnerable to hackers who find ways to steal funds from the software. Another risk is that some digital currency is only a few years old and could potentially lose value, leading to an entire system crash.

The Bottom Line

It is possible to make money farming cryptocurrency. However, as time progresses, it will become more and more difficult to make money framing cryptocurrency, and risks will most likely become higher. 

Farming digital currency is not for the novice. You should familiarize yourself with all risks involved before you begin a yield farming investment strategy.

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