How to avoid this common cryptocurrency investing mistake

There’s something more satisfying about having a single dollar in your pocket than a dollar’s worth of loose change. Experts say the same intuition applies to cryptocurrency — and it could be getting some investors in trouble.

It’s a psychological impulse for the whole over the fractional known as “unit bias.” Unit bias was first invoked when researchers discovered that diners were satisfied after a full plate of food, no matter what size the plate. But the instinct seems to also apply in the digital world. Many novice investors — rather than study the blockchain innovations “altcoins” such as Ripple, Cardano and Dogecoin are supposed to represent — simply buy the coins whose low prices mean they can own them outright.

“Something about buying the whole, single unit of Litecoin feels better than buying a tiny portion of one Bitcoin,” as a one blogger wrote on blockchain site Steemit. “One could take this a step further…How about buying [thousands of] dogecoins for the same price? Now you’re talking! Much win!”

 

continue reading »