Cryptocurrency 101: 7 Safe Investing Practices to Avoid Scams

September 1, 2022

What Is Cryptocurrency, and How Does it Work?

In simple terms, cryptocurrency or crypto is any digital or virtual currency recognized as a medium of exchange. It uses cryptography to secure transactions and control the creation of new units of a particular cryptocurrency.

Cryptocurrency Investing for Beginners

You can choose to invest in crypto either for the short-term or the long-term. Long-term investors mostly hold major or promising cryptocurrencies for long periods to reach a decent profit margin. On the other hand, short-term crypto investing involves buying and selling cryptos more frequently with the goal of making high-percentage gains on their portfolio within a short period of time.

With the current crypto market valued at about $1 trillion with an average daily trading volume of about $60 billion, there’s no doubt that this is a lucrative market with a lot of growth potential. Cryptocurrency is still new and largely unexplored territory, and the potential benefits of investing in the market are limitless.

Benefits of Investing in Crypto

1. They’re digital and global

This makes them more accessible than traditional assets, which are often subject to restrictions based on location or jurisdiction.

2. High volatility

Cryptocurrencies are notoriously volatile, which makes them a risky investment but also one with the potential for high returns.

3. They’re decentralized

Since they’re not subject to the control of any one government or financial institution, it makes them less susceptible to manipulation and interference.

4. Privacy

Cryptocurrencies are often lauded for their privacy features. Unlike traditional assets, which are subject to disclosure requirements, cryptocurrencies can be bought and sold without revealing the identity of the parties involved.

5. Transparency

Cryptocurrencies are built on blockchain technology, which is a publicly accessible ledger of all transactions. This makes cryptocurrencies a more transparent investment than traditional assets, which often lack transparency.

6. 24/7 Market

Unlike currency and stock markets, the crypto markets are tradable even on weekends and holidays. This accessibility is convenient to price speculation traders and also makes it easier to liquidate your investment at will.

Investing in it might seem like an obvious choice if you’re interested in seeing your money grow exponentially over time — but as with any investment, there are risks involved. One major risk worth considering as a beginner investor is cryptocurrency scams.

According to Statista, investors have lost over $20 billion in investments over the past five years, mainly through crypto scams. With that said, it’s important for both beginners and experts to familiarize themselves with the common types of scams. As a plus, we’ll give you the best safety practices to you can integrate into your investment journey to help you avoid falling victim to a crypto scam.

Types of Cryptocurrency Scams

Some common scams include:

1. Ponzi Schemes:

These promise high returns on investment but instead use new investors’ money to pay older investors. In reality, there’s no legitimate investment as you’re required to bring in a newer investor for you to earn a commission on their investment.

2. Crypto Investment Schemes:

Scammers approach you with an offer to invest in a cryptocurrency investment platform offering a high return on investment(ROI). Once you’re done setting up your account and manage to “invest,” you never get any ROI, and you end up losing your money

3. Fake ICOs:

Initial coin offerings(ICOs) that are nothing more than scams to steal investors’ money. There are many red flags that can indicate that an ICO is a scam, such as an anonymous team, no working product, and unrealistic promises.

4. Pump and Dump Schemes:

A group of scammers works together to artificially inflate the price of a cryptocurrency by buying it in large quantities. Having blocked investors from selling, they sell it off at an inflated price, making a profit while leaving investors with worthless coins.

5. Phishing Scams:

Scammers use fake websites and emails to trick people into giving away their private keys or login information. The scammer may also impersonate a trusted source in an attempt to lure you into completing a transaction.

Other cryptocurrency scams include fake exchange scams, romance scams, social media scams, giveaway scams, and loader scams.

Best Safety Practices for Investing in Cryptocurrencies

Here are seven of the best safety practices for investing in crypto, so you can avoid scams and make the most of your investment.

1. Get Educated

There’s no shortcut to cryptocurrency investing; if you’re new to the markets, there’s a lot to learn. You need to understand the basics of investing, the types of investments, and how best to differentiate between legit and scam investment opportunities. For beginners, investing in cryptocurrency can be too exciting, especially if you got in with a get-rich-quick mindset.

Crypto markets are highly volatile, which opens doors to possibilities of making high profits. However, it is important to remember that investing in cryptocurrencies is speculative, and there’s also an equal chance of you losing. So, if you get offers promising consistent 100% ROI or other crazy figures, be warned. It’s likely a scam.

In this regard, learning how the crypto market works first-hand is your best bet in safe investing. There are tons of educational material online that can give you knowledge of the dynamics of the market. However, the Ovoro app, the best revolutionary educational tool for both beginners and expert investors, gives you knowledge as well as practical skills all for free. Ovoro lets you invest in simulated currency so that you can learn the behaviors and trends of crypto markets in real-time.

2. Use a Reputable Exchange

After you’ve fully understood the dynamics of the crypto market, the next important thing is to open an account with a reputable exchange. There are many exchanges out there, but some have been shown to have poor security practices and customer service. Working with an exchange that is reputable and has a good track record will help you avoid scams and protect your investment.

Investing in shady unregulated exchanges may likely lead to a loss of funds. For example, if the exchange becomes bankrupt due to circumstances such as a market crash, it’s unlikely that investors will get their money back. It’s also possible for hackers to break into these platforms and steal user data or coins stored on them, so it’s best not to take any chances when it comes to choosing an exchange.

3. Do Your Own Research

In order to be successful at investing, beginners need to do research and understand the underlying technology behind cryptocurrency before they invest. There are a lot of different digital currencies out there, and not all of them are created equal. It is important to understand the difference between each type of cryptocurrency and what they are each used for.

You should also research the team behind the currency and their track record to find out whether the currencies are worth investing in. A strong team will have a solid foundation with specific goals that have been met in the past. If you cannot find any information about who is working on the project, then it is probably too risky to invest in this project as it comes off as shady.

4. Identify Good Sources of Information

When you depend on the news to make investment decisions, it’s important to ensure that you use reliable sources of information. After all, you don’t want to make mistakes that could cost you money after making an investment based on a thread you stumbled upon on Twitter or an influencer endorsement you saw on Instagram.

In a market filled with a lot of information noise, Ovoro acts as a source of credible news and events on its mobile app. Our app’s NEWS tab only provides you with verified facts and news about cryptocurrency. We collect them from several trusted resources in the space, such as CryptoSlate, Finbold, etc., ensuring the content being delivered to its users is credible.

We also have a Discord channel where you get to participate in worthwhile discussions on everything related to crypto.

5. Keep Your Private Keys Private

Your private keys are what give you access to your coins, so it’s essential that you keep them safe and secure. Make sure they’re backed up and stored in a secure location you can get to quickly if needed.

There are a few different ways to keep your wallet’s private keys private. The most important thing is to never share your private keys with anyone, especially any unknown entity approaching you via email. Here are some of the best wallets to securely store your crypto:

  • Use a hardware wallet: This device stores your private keys offline and signs transactions in a secure environment. Hardware wallets are considered the most secure way to store your cryptocurrencies, as they are not connected to the internet and are, therefore, not susceptible to hacks.
  • Use a paper wallet: A physical piece of paper with your private keys printed on it that’s used to store keys offline, mostly in a safe or a safe deposit box. It’s the safest option to protect your private keys from malware.

6. Keep Track of Your Investments and News Events

When investing in cryptocurrency, it’s important to keep track of your investments and the latest news events. This will help you make informed decisions about when to buy and sell. This is mainly because most markets, including crypto markets, may be affected by external factors such as natural disasters or world politics.

Make sure to stay updated on what is happening around the world so that you can protect your investment or look for new opportunities. For example, people often purchase coins when there are new regulations from a country such as Japan or China. Some people invest because they have heard good things about an upcoming event, while others count on educated guesses.

7. Diversify Your Portfolio

When you invest in cryptocurrencies, you should always diversify your investments. This means investing in a number of different digital currencies rather than putting all of your eggs in one basket. By diversifying your investments, you will minimize your risk and give yourself a better chance of making a profit.

Remember, cryptocurrencies are highly volatile, and their price can fluctuate wildly. As such, it is important that you understand your risk tolerance and only invest what you can afford to lose. It’s advisable for beginners to stick with well-known coins such as Bitcoin or Ethereum, which have good support and can be easily bought on any exchange.


Investing is a journey. With the right tools, knowledge, and mindset, you will soon be on a clear path to success. Take your time to garner the right knowledge, work your way up from the basics, and then find the right tools, such as Ovoro, to add value to your investing experience.

At Ovoro, we’re on a mission to spread financial literacy, primarily focusing on cryptocurrency investing. Our revolutionary free-to-use tool, the Ovoro app, let’s you invest in our four different investment pools with zero risk. The Ovoro app’s AI-powered algorithm trades for you 24/7, and you can monitor it to copy and learn from its executions.

The cryptocurrency world is vast, and opportunities are countless, so don’t hold yourself back; the time to invest in cryptocurrencies is now. So if you want a risk-free investment and free education, download the Ovoro app on Google Play Store or Huawei AppGallery today.

For further communication, join our Discord or reach out to us via email.

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