This can be small, like paying too much in gas fees
or as large as losing your entire account.
But the good news is these
are totally avoidable to help.
To help, here's my friend Dan.
- What the *** am I supposed to say?
And I'm here to help.
- I'm going to quiz him on every crypto trap.
For every question he gets right,
the more money I'm going to donate.
If he gets everything right,
we're going to donate $1,000.
To warm up, for $5,
Who is the founder of Ethereum?
- Vitalik Buterin
- That's correct.
- Better not get harder.
The crypto space is full of hackers, and not
all of them are going to have good intentions
like that one guy who stole $600
million and then gave it all back.
I mean, there's nothing more appealing to a
hacker than stealing money that can't be tracked.
One of the most simple yet effective
measures to take in preventing your account
from getting hacked is called 2FA.
Every exchange has it, and you're at risk if you're
not using it. If you don't know what 2FA is,
it's a type of security that requires
two forms of identifying yourself before giving
you access to your account.
This is most commonly built as a text
message code, but even that isn't perfect.
So I would highly recommend getting set up
with an Authenticator app like Google Authenticator.
These apps produce a new code every few seconds that
you then enter into the site that you're logging into.
If you have this set up, the only way
someone can get into your account is if they
have both your password and physically have your phone.
And let's be honest, if someone has both of those things,
you have bigger fish to fry.
For $10, what does 2FA stand for?
- Two factor authentication
- We'll take it.
2FA?
2nd fat ***
Now, you're safely logged into your account,
but you're still not totally safe, from yourself.
That's because you don't have a goal or a plan.
A goal is the reason why you're investing in crypto.
Is your goal to invest in promising projects to hopefully gain
a good return on your money in the long term,
or maybe your goal is to yolo $5000 into
meme coin just because a TikTok told you to.
Whatever your goal is, you should establish
that in advance because this helps you
make a logical investing plan. Let's say your goal is
to build that portfolio long-term.
One way to meet that goal would be to
buy $100 in Ethereum and Bitcoin every week.
And on top of this, your plan could say if
crypto drops 30% in a single day, you won't sell,
and instead you'll triple your buy that week to $300.
Here's the thing to remember.
No plan is the perfect plan because we
don't know what the future will hold.
What's important is to set
yourself guidelines. Humans, me included,
I'm bad about this,
if there's Gray area, we will make
the emotional choice when the time comes.
If your plan is to maybe possibly buy $100 a week,
you're not going to buy $100 a week.
Let's be honest.
Set yourself a plan and stick to it
until you decide to change your plan later
and then stick to that new plan. Here's the problem.
People buy crypto without a plan,
just hoping for infinite returns,
then they see their portfolio down 15% one morning.
These people are much more likely to panic and
sell right at the worst time, right here.
So set a goal and a plan.
Actually write it down and you will
be a better investor instantly.
For $25, what's it called when you spread
your crypto buys over regular intervals?
- Dollar cost averaging.
- Ding Ding Ding.
$25 bonus question, Where can
you find additional content,
buy alerts and free coaching every day?
- On the Patreon.
- Ding Ding Ding.
We have a plan set up, thank god.
But now what do you trade?
You're browsing around and you see Dogecoin is
only at $0.13, but Chainlink is at $14.
So Doge is way cheaper, right?
This is a common mistake.
Price doesn't matter.
Market cap matters.
Even though Doge's price per coin is far
lower, we can see the entire market cap
is actually three times larger than Chainlink's.
New projects, especially meme coins, will often have billions
or trillions of tokens in their supply in order
to make people feel like they're getting in on
the ground floor when they're actually not.
Let's see if Dan knows the difference,
For $50, what's the difference between price and market cap?
- Price is the current price of
whatever asset we're talking about.
Market cap is the pool of all the money combined.
- That's pretty good.
- You know what I mean
Do you want to expand on that?
Not really.
Because you already were about
to say, that's pretty good.
- That's pretty good.
You're sitting there scrolling down to the 10th page
of CoinMarketCap and you find a crypto
with a $500,000 market cap and you look over
to Bitcoin and you see $700-800 billion.
So could you 1.6 million times your money?
In theory, yes.
But no.
Almost every single coin past the top 100 or
so will come and go at some point.
But you might be thinking, Shiba blew up.
Dogecoin blew up.
What if I choose the next one that does the same?
And you could, but this is very unlikely.
We need to be realistic. We need to consider what's
called the survivorship bias.
Basically, we hear about projects that
blow up because they blow up. So it seems like there's
constantly projects blowing up.
However, in reality, we just don't hear about the
10,000 projects that didn't go to the moon.
Sure, there is a place in a portfolio
for moonshot bets, but that should be a
very, very small percentage.
For $75 to charity,
How much money was lost in crypto
scam rug pulls last year?
A, B, C or D?
So I'm going to guess and say B.
- That's wrong.
It was A. Sorry charity.
And you don't have to just worry
about scammers taking your money because you
can completely mess things up for yourself.
Crypto transactions are designed to
be permanent and irreversible.
This is so that no one
has control over an entire network.
Someone had the ability to reverse transactions.
This would defeat the
whole purpose of decentralization.
But this has an unfortunate consequence.
If you send crypto to the wrong
address, it may be gone forever.
If you're sending a large amount, it's always
best to do a test transaction first.
Or you can avoid mistakes by only scanning
QR codes when copying and pasting wallet addresses,
or even worse, writing them down manually.
Mistakes happen.
Always double and triple check your wallet addresses.
$125 to charity if you get this right,
But there's a twist, if you get this wrong.
For the rest of the questions, you have
to stand in a squat on this chair.
- I'll get it right.
How many digits are in an Ethereum address?
- 36.
- Squat.
- You don't squat with legs this close together.
- It's called the Sissy squat. [Laughs]
- All right, can we get going?
Let's get going.
Unfortunately, incorrect wallet addresses aren't the only way you
can become your own worst enemy in crypto.
When it comes to the stock market, buying and selling
is a bad idea because it quickly accumulates your tax
obligations, which can really eat into your profits.
With crypto, it's an even worse idea.
Not only will you have that hefty tax bill, but
you'll also pay a ton in fees, which can make
a huge difference.
Let's say you invested in $100
and it jumped up 30% to $130 where you sold.
Uncle Sam gives you the thumbs up, but that quickly
turns into a pay up because you have to pay
short term capital gains tax on that $30 in profit
you made, which would likely be around 20%, plus a
couple of dollars in transaction fees.
So your $30 just turned into $22.
And that's just one trade.
For $150 to charity,
Where can you go to save up to 85%
on transaction fees for cryptos and NFTs and get
free crypto back on every trade over $10?
It's FTX.
- That is right.
Thanks to my sponsor, FTX
linked down in the description.
Can you do your ads [?]
Let's say you made a few good trades
and you're feeling good about your skills.
You decide to try out leverage.
Now, leverage is neither good nor bad.
It's just a powerful tool, a
very powerful tool in investing.
This is where you borrow money to increase
the exposure of an investment, and tons of
investors have fallen into this trap before understanding
the true consequences of leverage.
For $175,
- I don't know.
I can't focus.
$1300, probably.
No.
This might seem common sense to some, but you
wouldn't believe how often people get scammed by it.
Fake crypto account scammers.
You've probably seen comments like this or like this.
Replying to those will usually lead you
down some kind of rabbit hole.
Whatsapp scam don't do it.
They even do this on Instagram. Check this out.
Only the top account is me.
The rest are all scammers.
And if you want, you can go follow me there.
Since Instagram doesn't feel like verifying me, you
wouldn't believe how successful these scammers are.
For $190 to charity and a
brand new Ledger Nano for you,
the question is, when I tracked down a crypto scammer posing
as me, how much money did I find in their wallet?
That's wrong, $2 million.
Here's your consolation prize.
Was I right?
No.
What if I told you even fake
scam accounts aren't the only issue.
Real influencer accounts can lose you
a whole lot of money.
Crypto is getting more and more
popular, but it's still largely unregulated.
For example, with stocks, it's very illegal
to promote them without a massive disclosure.
With crypto, this is a bit of a gray area.
I mean, not too long ago, Kim Kardashian, who
has a quarter billion followers, promoted Ethereum Max on
her story, no relation, which hasn't exactly performed so
well over the last couple of months.
It isn't necessarily a scam coin,
but you get the picture.
Everyone from gamers to streamers to adult
stars have dabbled in questionable financial advice
Draining the pockets of their audience.
The moral of the story is no matter who
tells you what, always do your own research.
Plus, doing your own research gives
you the confidence in your investments.
Because you know why you're buying, not
just because someone told you to.
- Just ask the question.
You're doing great.
For $200, what is the term for the recovery
or backup phrase of a crypto wallet?
Seed phrase.
Ding Ding Ding. How do you feel?
- Can I stand?
Yes.
I feel good.
I don't feel that good.
Thanks to Dan, we racked up $465 in donations
to the organization for autism research, but $465 seems
like a random number, so let's just go ahead
and round that up to $500. From here,
I recommend checking out this video where I
take investment advice from robot Warren Buffett.
I'd like to thank you so much for watching.
I'm Max Maher and I hope you're profitable day!