This article breaks down the 3 reasons why you should not be paying for crypto tips or admission into crypto groups that promise easy money.
Illusion of Gains
There are a lot of unfortunate similarities between the way that the cryptocommunity functions and the schemes ran by businesses in everyday life.
Have you ever been watching TV late at night and you flick by an infomercial that’s advertising some supplement that you can take that will help you to lose 50 pounds in two months? Usually, the infomercial will make some outrageous claim that all you have to do is take their supplement and walk around for 20 minutes every day and you’ll lose those 50 pounds no matter what – even if your diet remains terrible. (Read also: Guide on Identifying Scam Coins)
These infomercials usually include a few individuals that serve as ‘customer testimonials’ that claim that they tried the supplement/product/service that was being offered and can validate that the advertisement is legitimate and that it worked for them.
Do you want to know what all of these schemes have in common?
They prey on people’s incessant need to accomplish their dreams with little to no work.
What Does This Have To Do With Cryptocurrency?
If you’re an investor in the world of cryptocurrency, you’ve probably noticed an absurd number of individuals claiming that they’ve become ‘rich’ from cryptocurrency (which may be true). A handful of those people even claim to have such an extensive knowledge of all things cryptocurrency that they consider themselves to be ‘experts’. Some of these ‘experts’ will make themselves readily available via social media and other platforms for free. (See also: Bitcoin vs Alt Coins Returns: Comparison of Gains Between Bitcoin & Altcoins Investing)
However, there are a number of these individuals that will attempt to charge others for their time and expertise. They usually set up paid groups where someone must forward some pre-determined amount of cryptocurrency in order to gain access to such a group. Generally, the price of such a group is exorbitantly high in most cases, ranging from $100 worth of cryptocurrency/cash to $5,000+ for only a months worth of access.
Similar to what you see on the infomercials that I mentioned at the beginning of this article, many of these individuals know how confusing cryptocurrency can be to those that have zero knowledge in this field. This, compounded with the fact that the knowledge required to understand financial markets and investment as well, makes investing in cryptocurrency a seemingly insurmountable task. However, you can see that there is a slew of individuals that appear to be making a killing on this stuff. Its unregulated and the world of cryptocurrency is still relatively new. Thus, in many people’s minds, they feel as though they’re one of the first settlers in California at the beginning of the gold rush, but they don’t have any mining equipment nor knowledge of how to even identify where the gold is and/or dig for it. (Read more: Coins, Tokens & Altcoins: What’s the Difference?)
So, when out of nowhere, a knight in shining armour comes riding in on his stallion to let you know that they have decoded the complex fabric that wraps cryptocurrency, it seems fairly reasonable to follow this person. Besides, you think, what’s $100-300 in the grand scheme of things if I’m acquiring the knowledge necessary to make me thousands, potentially?
While all of this may seem logical – it’s not. Below, I will provide several reasons for you why you should not under any circumstance pay any individual to give you advise/guidance/investment tips in cryptocurrency.
Reason #1 – Most of These So-Called ‘Experts’ in Cryptocurrency Have Absolutely No Idea What They’re Talking About
Yup, you read that right. Most of them have no idea what they’re talking about. Unlike the regulated financial markets, where one must actually pass an exam displaying some sort of financial acumen and fundamental knowledge of investing, these ‘experts’ in cryptocurrency have no bar they must meet. They are not certified by any board or agency that accredits cryptocurrency investors. Thus, there is no way to validate the credentials of any of these people.
This, in itself, isn’t the main issue though. The main issue is that most of these people wouldn’t pass any such test if one did exist because a lot of them don’t actually know what they’re talking about. And why should they? No one’s there to audit them and the anonymity many of them assume within this sphere makes them free from liability if anything does go wrong. Also, since most of them accept payments in cryptocurrency, whenever you do find out that they’re a fraud, your payment is long gone and there’s nothing that you can do to track the individual down. There’s a chance that there may not even be a reliable paper trail for you to follow as they may have transported the payment straight to an exchange and liquidated it down. (Read more: Crypto Beginners Guide: 5 Things Crypto Newbies Should Know)
Reason #2 – Many/Most of These People Lack the Resources to be Effective in What They Claim They’ll Provide
Generally, in the financial world, no one works alone when attempting this type of endeavour unless they’re simply advising clients on a one-on-one basis. However, when hosting a group, it’s downright impractical to assume the task by one’s self, even if that person is a ‘full-time cryptocurrency investor’ as many claims.
The reason why is because there is too much going on in the market for one person to analyze. Thus, without a team or some consortium of people working together to break down the market and continually putting out a feed of what’s going on – you’ll always be receiving inferior, late, or second-hand information that devalues the premise of the service being rendered anyway.
Reason #3 – You Can Do All This Yourself!
This is perhaps the strongest reason on why you should avoid going with any of these individuals that purport to have the ultimate solution to investing in cryptocurrency – You can do all of this stuff yourself!
All of the information that you’ll need to be a successful cryptocurrency investor can be found on Google.
Various insights on technical analysis, fundamental analysis and coin analysis focused on the cryptocurrency market can easily be found on the internet. Here at Master The Crypto, we specialise in crypto knowledge!
Beneficial Resources To Get You Started
If you're starting your journey into the complex world of cryptocurrencies, here's a list of useful resources and guides that will get you on your way:
Trading & Exchange
- Crypto Guide 101: Choosing The Best Cryptocurrency Exchange
- Guide to Bittrex Exchange: How to Trade on Bittrex
- Guide to Binance Exchange: How to Open Binance Account and What You Should Know
- Guide to Etherdelta Exchange: How to Trade on Etherdelta
- Guide to Cryptocurrency Wallets: Why Do You Need Wallets?
- Guide to Cryptocurrency Wallets: Opening a Bitcoin Wallet
- Guide to Cryptocurrency Wallets: Opening a MyEtherWallet (MEW)
This series of articles are contributed by CryptoMedication
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Serial Entrepreneur. Advisor to multiple startups