Cryptocurrency is fascinating, but it’s also volatile and riskier than the stocks or bonds in your bank account. It’s not as regulated and it’s more likely to go up or down by double-digit percentages in a day. As such, you should never invest more money than you can afford to lose in cryptos. And if you want to be safe, you should invest only in coins with proven track records that have survived impactful events and stay away from “hot” coins that are speculative.

Bitcoin, the oldest and most battle-tested of the lot, was created in 2009 by an unknown person whose identity is still a mystery (hence the term, “crypto“). Since then, a number of other cryptocurrencies have been added to the fold, all with their own unique features. But not all are created equal: Some are more prone to market chaos, hyperinflation, or being stolen by bad actors. Moreover, some are less mature than others in terms of technology and infrastructure.

If you’re planning to invest in cryptos, you need to be aware of these risks and do your homework. You should choose a reputable cryptocurrency exchange or marketplace that follows Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines. Moreover, you should always have 2-factor authentication enabled on your account. This will require you to enter a code from a separate app or device before you can make any withdrawals. This way, even if your phone is lost or stolen, your cryptocurrency will remain safe.

Some of the biggest risks associated with cryptocurrencies involve hacks, extortion, and scams. There are countless cybercriminals looking to steal your digital assets. They can use a variety of tactics to do so, including SIM swaps whereby they get your phone number and then reset the passwords on your crypto accounts by contacting your carrier. They can also launch pump-and-dump scams, whereby they hype a coin to attract investors and then sell off their holdings to pocket the profits — which in turn sends the price plummeting.

Another big risk is that you can’t trust the exchanges or banks that hold your crypto assets. The vast majority of these companies aren’t regulated and don’t operate like brokers or banks. And if they’re hacked or shut down, you could lose your hard-earned investments. This is why it’s important to self-custody your crypto by keeping it in a wallet that you control. Alternatively, you can buy crypto on an exchange but then move it to a wallet that’s under your own control. This is often the best strategy for beginners, but it comes with its own set of risks.