Who is a crypto-hamster
Today my old friend asked me such a question, and this prompted me to write a post-warning about possible "pitfalls" for a beginners on the crypto currency market.
In the narrow sense of this concept, a "crypto-hamster" we can be called any novice and inexperienced crypto-currency trader, but in a broader sense - everything is more complicated.
The fact is that any crypto currency is a financial pyramid and a potential SCAM, because it is not backed by any material values and in general with no guarantees, except for the faith of the coin holders in the fact that when it is needed - someone will buy this coin from a good price. In addition, there is a whole layer of people who earn on this coin in the process of its turnover - these are exchangers who take commission, these are traders who earn on the course differences, periodically fixing their profits, these are the holders who buy a coin, keep this coin in their wallets, waiting for a global multiple growth rate so that later it is profitable to sell it.
That is, all these are people who bite off their pieces from a pie, withdraw this money and spend it on their own needs. But I think that it is not necessary to explain the fact that with resale alone, money can not come out of nowhere, in order for someone to make money on it - someone else must lose money. Crypto-hamsters usually lose their money, and due to their losses, they keep afloat a huge financial pyramid called "the market of crypto-currencies" for a long time.
Pumping money out of their wallets is called a hamsters cutting, and the same hamster, as a rule, is can be cut many times and in different ways.
Method 1 - at the entry stage.
The first method is a cuting at the stage of entering the hamster in cryptocurrency market. So, the hamster, having looked in YouTube about a couple of stories about successful traders who have earned millions of dollars almost from scratch, decides to become a successful trader too, buy a some coins, bargain on the exchange and make their coveted X1000. In fact, for an uninitiated person who has never turned in these circles, there are very few ways to exchange fiat-money (well, that is, dollars, euro, rubles, hryvnia, etc) to the cryptocurrency, without significant losses, and if to say even easier, A hamster can only use a single method - type in Google search query "buy Bitcoin."
Google will provide for a hamster a whole list of Internet exchangers, which have one thing in common - a huge commission, which they take for themselves for exchange. For example, when buying Bitcoin (and about other currencies the hamster knows little and does not trust them much), the exchanger will withhold 30 percent of the commission, and then after the transaction, 10 percent will be eaten by blockchain, because the average hamster invested the amount of around 100-200 dollars.
Helpful advice: If you made a firm decision to become a trader, do not act at random, ask someone to help you. This person should be aware of the topic and this should be the person you trust. Surely he or she will help buy some coins at a reasonable price
Method 2 - with ICO.
Let's imagine that the hamster managed to buy its 0.01 BTC, that he managed transfer it to the stock exchange, and at the same time he was not robbed by a fraudulent exchange service he did not lose money, making an error when copying the address, etc.
Immediately after the authorization on the exchange market, the only thing he sees for himself is familiar and understandable - is the trollbox (in other words, the chat room). All the rest - some graphics, curves, candles, columns with a bunch of digits, are terrible and incomprehensible to him, so the first thing he does is write to the trollbox, like "Hey guys, I'm newbie here, tell me about what I should do here and how I should start"
In the trollbox surely some dude will write to hamster and he will give the hamster a link to his VK or TG or FB, and he will say "knock I'll tell you." After the hamster knocks - this dude will tell him... a beautiful story about how home-grown IT-talent came up with a new generation of cryptocurrency, for years ahead of the technological level. He will also tell the hamster about how his great invention, was supported by all the sharks of the financial market, even the president of some big Swiss bank there bought these coins.
He will also tell to hamster, that in six months or a year this currency will be released into the top, it will outstrip all that exists at the moment, become the main global electronic means of payment and its rate will soar in thousands or even tens of thousands of times, and you, dear Hamster, must just invest your money in our ICO and buy our coins, which in half a year will make you a millionaire.
Such investments end in the same way, as one serious trader from GOLOS said, this combinations ends predictably: "Guys vacation in Hawaii, and you are an investor" =)
Especially I ask you to beware of ICO, promoted in the countries of the former USSR, since 99.9% of them are a notorious scum, and the whole campaign was be organized only for cutting hamsters.
Helpful advice: Do not invest your real money in little-known and obscure ICO, if you really want to play it - take part in the programs airdrop/bounty and you'll get a few tokens for free or exchange for some simple action for example
upvote and/or resteem.
For example, once, on the exchange market RuDEX, within the framework of such a program, I received 500 SEED tokens free of chargeit was $10, which then during exchange rate jump I sold it for $25.
Method 3 - signals, trade from bulls/bears/walrus
I think everyone who has dealt with the crypt heard about the signals. It's like when some guy creates a site or group in FB or channel in TG, where he declares himself to be a greatest analyst. He comes up with a beautiful story about how, using his predictions, thousands of people became very rich (and why did not you become rich then, since you're so clever?), and begins to publish his prophesies. It's good, if it's an ordinary dilettante, who is trying to raise his self-esteem in this way. But most often the signals are not dilettantism, but are part of a well-planned scheme for cutting hamsters, which is implemented approximately like this:
There is a signal that at such and such an exchange tonight it is expected that the exchange rate of such and such currency will decrease due to the fact that the trade in this currency was banned in Ethiopia (for example) and after its end, the price of the coin will rise again. Hamsters crowd run to this exchange waiting for a dump (by the way, a hamster, always running somewhere, he can not sit still, he must constantly do something, commit some inadequate actions, even if you do not need to do anything at the moment. Hamster usually runs where there is no more money).
So, hamsters came running to the exchange, and there actually took place some drawdown of the course of this coin. All hamsters bought up this coin and amicably waiting for the rebound. But at this time, large holders of this coin, begin to massively place warrants for sale at a low price, because of which the the exchange rate rushes downwards. The frightened hamsters, who already bought up this coin, as they say, "for all money", start frantically selling what they bought at any rate and for any money for which at least someone can buy this coin (in any case, obviously cheaper than they bought), thereby further strengthening the panic and lowering down the exchange rate, as a result all remaining hamsters, sell their remains of coins for quite some funny pennies.
Well, this is always the case, the hamsters for some reason is always sure that any fall in the rate is lower than they expected, or lower than they read on the signals site - "it's all, the bubble burst, the pyramid collapsed, we must at least save something that can still be saved". And the large stack holders, the so-called "bulls", at that time quietly cancel their unused orders and let the market independently normalize this situation, after which they gradually sell their coins already at the normal rate and then they fix their profits. Do not forget that they bought these coins from panicking hamsters for funny pennies. This is how it works, ladies and gentlemen. The wool flies, hamster is running, the wool is trimmed, and hamster is without money. Thus, due to the money of hamsters, there exists and successfully operates a huge cryptocurrency market that without long-term irrevocable infusions would have long ago ceased to exist.
Helpful advice (whole two):
Do not pour into the cryptocurrency your money, the loss of which is catastrophic for you, risk only those money that you are not afraid to lose.
Never panic. In 9 out of 10 cases, after a dump (a sharp drop in the rate), a rebound is occurring in the very near future, often even by inertia it "bends the stick" of rate upwards, a little stronger than it was before it fell. Do not fuss, do not make sharp movements. Wait a day or two, everything will settle down, everything will return to normal - then you will earn. If rate not come back to normal condition - wait a week or two, you will not make it worse anyway.
The remaining tenth case is the so-called force majeure, or a situation called the "black swan" in the world of crypto-enthusiasts, such as delisting a coin from a large exchange market, hacking a stock exchange with subsequent theft, death/bankruptcy of a large funder, etc. Shit sometimes happens, you are not insured against it and no one is insured. In order for you not to incur large losses in case this happens - read item 1.