The world of cryptocurrencies is in crisis again. This time he was rocked by the collapse of the FTX exchange. Not all clients of the cryptocurrency exchange managed to withdraw funds, although all specialists have long warned: do not keep funds on the cryptocurrency exchange if it is not necessary. Mike Satoshi talked about how to protect yourself from the loss of digital assets in the next episode of the Crisis Financial Backpack series on the Financial Prepers channel.
See also: Geographical diversification, because it is worth thinking about transferring some funds outside the Polish financial system
So far under a special series of talks he has held Treasury Mint, Sax Bank And providers of financial solutions related to cryptocurrencies OKX.
We have completed the following sections of the series so far:
Bitcoin and Ethereum are the biggest and most important cryptocurrencies in this world. All those who wanted to further diversify into digital assets know this. The end of 2022 is not a good time for this sector, but many investors see it as a buying opportunity. Exactly one year ago, the price of Bitcoin fluctuated around 69,000. U.S. DOLLAR. Today, we can only buy Bitcoin for a fraction of that amount, because the exchange rate at the time of this writing and posting of the conversation is USD 16,500. The market capitalization of digital assets has shrunk from nearly $3 trillion (November 2021) to $850 billion today.
See also: FTX officially files for bankruptcy, it is the Enron of the cryptocurrency world
Cryptocurrencies cannot be held on exchanges
The first issue regarding cryptocurrencies is how we want to buy them: we can choose to buy anonymously or not. These are the first decisions that an investor encounters on his journey in the world of digital assets. Mike Satoshi explains all the purchasing methods once you decide whether to remain anonymous or not.
Another issue of digital diversification is how to organize a portfolio. In addition to Bitcoin and Ethereum, we have stablecoins. A program expert talks about what stablecoins are. We also learn about the risk as all stablecoins have a built-in blacklist system, i.e. if our transactions look suspicious, funds may be blocked and this cryptocurrency’s smart contract will not be serviced.
“One thing must be emphasized: we do not store cryptocurrencies on wallets. The wallet holds the key, like the key to a safe,” Mike explains. A similar analogy of a crypto wallet is with an ATM card. We can lose the card, but we don’t lose the funds, because they are stored in the system. The password for the key, on the other hand, it is usually a combination of 12 or 24 words.Furthermore, in the episode we find out what happens in the event of various hardware wallet failures, hardware confiscation, wallet recovery, password emergency and everything related to security.
The whole episode is a step-by-step instruction on how to safely diversify in the digital part of the financial world, which is still called the “Wild West”, because the wave of regulation will come next year from US financial supervision.
See also: In a crisis, gold can be better than cash, especially if you want to physically flee with your capital
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