How To Spot A Bitcoin Scam In 4 Easy Ways
I can already see it happening. People are gonna come up with all kinds of exotic Ponzi/MLM schemes and say it’s backed by Bitcoin (or the latest “hot” coin). No my friends, stay away from the dark side.
- They promise you guaranteed returns. Especially if it’s big guaranteed returns. Anything above 4-5% per year (that the boring banks promise you via FD) is considered big. There are no guarantees in life, bro.
- The only thing "good" about the investment is the price is expected to go up. It brings no benefit to people except a means to gamble.
- The people behind it are shady (you know who I’m talking about).
- You need to recruit people to join…
If you wanna buy a cryptocurrency, you don’t need additional “upline” or “downline” to take care of your money
You can buy it directly from someone via a peer-to-peer platform like LocalBitcoins and then hold the cryptocurrency yourself.
Or if you’re like me and prefer using an Exchange, you can buy your Bitcoin directly there. You can even change from one cryptocurrency to another (e.g. Bitcoin to Ether) using Exchanges like Luno.
So, should you buy Bitcoin?
I’m not a financial adviser, so please take my advice with a pinch of salt. Actually, please take anyone’s advice with a huge pinch of salt — even so-called “experts.”
Here’s what I would do if I were you…
Make sure your basic finances are in order first, like:
- No credit card debt.
- Have 3-6 months’ worth of expenses in emergency savings.
- Own some other safer investments like Amanah Saham (Government Trusts) and ETFs.
If you’ve satisfied the above, then only would I recommend you consider high-risk investments like Bitcoin.
But even if you’re ready to buy, please don’t go all in yet
When I first bought Bitcoin, I bought a sum that I was comfortable to “test” with. (No, you don’t need to buy a whole bitcoin. You can buy small quantities of it down to 0.00000001 BTC).
Use this money as a learning opportunity. Plenty of things to learn such as:
- How to buy/sell Bitcoin.
- How to transfer it to other wallets anywhere around the world.
- Keeping your Bitcoin safe.
- What to do if you forget your password.
- How to convert Bitcoin into (and buy) other cryptocurrencies like Ether and Monero.
Yes, you could read up on all the above even before you get into Bitcoin. But without skin in the game, you’re probably not gonna be as motivated to learn right?
If yes, how much should I buy?
You’re gonna have to do your own research and make your own decisions on this one.
Some very smart people say put 1% of your net worth into it, and see what happens in a couple of years. If you’re young and have lots of spare cash (lucky you!), I think you could probably afford a little more risk. But again, this depends on what kind of investor you are, and how much potential pain you’re willing to live with.
Personally, I can’t tell you exactly how much I’ve put into Bitcoin/cryptos. What I will say is — the money I’ve put in is a very small percentage of my net worth. Below 3% of it.
Meaning, even if it all crashes down to 0, I wouldn’t be badly hurt. Yes, I’d be really pissed and very surprised — but financially I’d still be okay.
P.S. Please don’t ever borrow money to invest.