There is not a day that I could not see someone getting scammed, someone complaining about a token which keeps on dipping in value or a blockchain game that is not giving enough to enable users to immediately recover their investments.

I believe that all of these problems spring from one source and that is lack of awareness as to the basic rules of investing. So let's revisit those rules again. If you have a friend who is new to the space, you might want to share this to them. There is no need to credit me for it.

First, INVEST ONLY WHAT YOU CAN AFFORD TO LOSE. The crypto space is highly volatile which means that in a matter of few days the price of a token could double or could lose half of its value. Funds allotted for food and other basic needs should be kept for such purposes otherwise putting it in crypto is not really investing but gambling. One could not just put the money that they will be needing for food the next day and expect for it to grow twice in value immediately. Luck may smile at you sometimes but not always.

Second, NEVER INVEST IN ANYTHING THAT YOU DO NOT UNDERSTAND. Take the time to do an independent research before you invest. Understand the risks and challenges involved. It is never right to rely solely to influencers as they also have their own agenda for pushing particular coins or tokens to their followers. You cannot just rely even to the words of your childhood friend or relatives. The website of the project and its whitepaper may be the starting point but not the end.

Third, NOT YOUR KEYS, NOT YOUR CRYPTO. Self-custody is the safest way of keeping your crypto. Exchanges are like banks which could close anytime and run away with your funds. While authorities may make them accountable before the law, it is not a guarantee that your funds will be returned to you. Crypto is all about decentralization and one aspect of decentralization is putting the user in control of everything and with control comes the responsibility and the accountability of keeping your crypto safe.

Fourth, YOUR SEED PHRASE, PRIVATE KEY, SECURITY KEY, MNEMONIC PHRASE OR WHATEVER YOU CALL IT IS YOURS ALONE. The seed phrase of your wallet is the master key of the digital vault that keeps your wealth and investment. You need to keep it safe at all times and free from unauthorized access. Hence, you cannot just give it to anyone who will be asking for it, more so if the one asking is a stranger that you have just met on social media. No one needs to know your seed phrase but you alone.

Fifth, ALWAYS VERIFY THE WEBSITE ADDRESS THAT YOU ARE VISITING. Scams in the crypto space use sophisticated means to ensure that users will not easily detect that the website or app that they are using are carbon copy of the original one. If in doubt, always err on the safe side by verifying the address. Bookmarking the websites of crypto projects and dApps is the best way to steer clear from fake websites meant to obtain your seed phrases.

Sixth, CRYPTO IS INVESTMENT, NOT A LIVELIHOOD OR GET-RICK-QUICK SCHEME. The main problem with users especially the new ones is thinking that they could put all their funds in crypto and expect for it to grow for them to be able to buy their basic needs and pay their bills. While blockchain games may offer a good amount of money, it may not last long. As more and more users join and play, rewards need to be adjusted to keep the ecosystem sustainable. Enjoy it while it last but keep in mind that you cannot rely on it forever.

Seventh, DIVERSIFY, DIVERSIFY and DIVERSIFY. Diversification means not only putting your funds into one coin or token but also diversifying in other niches and asset classes. The combination of hodling, trading, staking, farming and earning from blockchain games means that a user will not only rely in a single strategy but in multiple streams that will grow his or her portfolio. Diversifying into other asset classes means that the user will not have to heavily suffer if the crypto market is down.

Eighth, DO NOT CHASE GAINS. Another common mistake of new users is buying a particular coin or token and selling it after a few hours or days even if is down compared to the price when they bought it just to chase those which are pumping. Panic selling is oftentimes the result of a user not being confident of the coin or token he or she holds and for the sole reason that it was bought because it is pumping at the time it was bought.

Lastly, THINK LONG TERM AND INVEST FOR THE LONG TERM. Time and again, we are reminded that successful people in the crypto space are those who invest not on hype but on fundamentals and solutions. What matters for them is not the short term gains but the long term gains. It's not only because they have diamond hands but because they are also confident of their holdings which is a product of careful and thorough research and risk assessment.

What other investment rules do you observe?

(You may notice errors in grammar and spelling. I immediately transcribe what is on my mind without proofreading before posting.)