How to avoid beginner mistakes while buying, using, storing and selling bitcoins? What is the best cryptocurrency exchange? What are the best practices for buying bitcoin? Why is security so important in cryptocurrencies? All of this and much more in our bitcoin dos and don’t list.
The world of Bitcoin is undomesticated and in some way outlawed. No exactly written rules, no governing bodies, no public order offices with a purpose of custody. That’s why it’s so important to know how to play the cryptogame. With this article, we will try to help you not only play this game but most of all not lose it. If you ever asked yourself the question “should I buy bitcoin?”, after reading this article you will know for sure.
- Use only reputable, verified exchanges
It’s as simple as important to ensure that you know all about the site that you’re about to use. If you will fall for some shady and uncertain providers, you can become a victim of a scheme. Choose only these exchanges that are reputable and verified. The more reputable and verified, the better. We recommend Binance as it is the biggest and most popular crypto exchange. Do your research and use trustworthy sources. If you want to read more go to the official project website and dig into their resources (bitcoin.org).
- Invest money that you can afford to loose
Pretty obvious but on the other hand pretty important. Don't risk your life savings, your real estate, or other of your material goods when you invest in cryptocurrencies. Stick to your head that bitcoin and the price of bitcoin and all cryptocurrencies are very volatile. Although you can earn something, the possibility of losing some assets is also high.
Before investing, determine what you have to spare and operate with these values. Cryptocurrencies, no matter their noticeable evolution, are still an investment at high risk. Keep that in mind when you will start investing.
- Use password managers and two-factor authentication (2FA)
Another consequence of bitcoin and other coins' virtual nature. You have to make sure that you’re acting responsibly and properly with buying and storing your cryptos. Think about it for a second. You wouldn’t like to go to your bank branch and be able to withdraw money from your account without traditional and credible verification, would you? So the situation with bitcoin is kind of similar. Remember that we’re talking about your money.
All possible security measures are required in buying or storing bitcoin. You have to back up your wallet to an external hard drive or USB like any other document. Forgetting private keys or any other passwords required to bitcoin operations is inadmissible. So is managing your password without a proper security system.
Password managers can generate unique and strong passwords for your accounts and store them securely. Besides using a strong password you might consider using two-factor authentication (2FA). Two-factor authentication (2FA) is the second layer of security protecting you from an unauthorized login to your account. It can be an app installed on your mobile phone or a mechanism sending you unique codes via SMS or email. There are also hardware 2FA devices generating unique login codes such as Yubikey.
- Generate a new address for each payment
Privacy is one of the most important and most prominent features of bitcoin and the whole crypto world. Anonymity is widely discussed when talking about cryptocurrencies but users have to make sure they comply with best practices to ensure their security and privacy. One of the most important good practices is generating a new address for each payment. Choose wallets and service providers enabling or using this feature by default such as OneHash.
- Set your investment strategy and investment goals
Like any other serious thing in life, investing in bitcoin is a dish best served cold. You can not enter this world without not only proper knowledge but without a proper and precise plan as well. Those things are not charades, improvisation is not the best advisor. For example, if you set your investment horizon to '3 months or 20% of return whatever comes first' do not change it unless the criteria are met. Take your emotions out of the equation.
- Don’t invest in what you don’t understand
Somehow a follow-up to the last “bitcoin dos” paragraph. Do your research. Bitcoin and its functioning can be pretty easy and somehow understandable, though you need know-how, at least at an acceptable level.
You either go for something fully or you can give it up on it at the very beginning. You either understand what you are doing or you should better leave it be. For good.
- Don't forget about every possible precaution
Back up your wallet, take security measures, don’t forget private keys or other important information to your wallet - these things are kind of an elementary school of buying bitcoin. Remember that you enter a serious, enormous world of different people. And not everyone in this world has to be nice or thoughtful.
Although getting rid of it fully may be impossible, try to eliminate the human factor from your bitcoin activity. Cryptocurrencies coins are designed with the highest security systems from its creation, though even they can not protect you from your possible security mistakes. Don’t share important wallet information with others, enable 2FA, or back up your wallet as well. Remember, better safe than sorry.
- Don’t fall for schemes
Our article may be treated as a system of interconnected vessels. All our hints are associated with each other and resulted from each other. If you ought to do your research, you ought to not go for schemes as well. One action comes as a result of the previous one.
We highly recommend doing your research and reading about the most common bitcoin schemes and how to avoid them.
If some exchange platform gives you incredibly good financial conditions, they are probably incredibly false as well. If something in a bitcoin world seems too good to be true, it probably is. Always keep that in mind.
- Don’t reuse your passwords
Password protection is a must-have in bitcoin management. That’s why taking special care with wallet encryption passwords is so important in crypto transactions.
The password used while encrypting wallets should be completely distinctive from others you use online, no matter if for mails, social media or anything. The uniqueness of a password may be a crucial part of your bitcoin journey. Complexity, difficulty, even abstractness - without all of your crypto wallet password is a no go and the danger for yourself and your assets.
- Don’t panic
We’re once again back with a creme de la creme of bitcoin and other coins. As it seems from previous experience, the fluctuation is written permanently in cryptocurrencies nature. That’s why when you’re on a losing streak for three days in a row, don’t panic and sell out all of your assets. History has a way of repeating itself. If a coin was at some value, it will probably reach this level once again. Panic is always a bad adviser. With buying bitcoins there is no exception.
- Don’t brag and tell anyone how many bitcoins you possess
Kind of self-explanatory. Pride, ego & swag may be appropriate for a rap hit song but rather not for a bitcoin buying. It’s no coincidence that the bitcoin community is known for its anonymity and that we still don’t know who Satoshi Nakamoto is. Silence is gold, especially in this particular environment.
Although bitcoin and all cryptocurrencies may seem new and misunderstood for most people, there's a method in this madness. But you have to take care while entering this new world. Unarguably at each step.
If you want to buy bitcoins for a thrill, invest in bitcoins, or simply buy something extraordinary with bitcoins, the whole process depends on YOU. Don’t stop learning, do your research, and broaden your knowledge. Read, talk to other people, have some doubts, and afterward solve them. Be interested in it. Use your brain, not emotions. Bitcoins and cryptos are here to stay so you have to be persistent in the game to play the game.
Bill Shankly used to say that “you are only as good as your last game” and the same goes for investing in cryptocurrencies. Bitcoin is as safe as your best practices. No more, no less.