OK, let’s face it — bitcoin is probably the best thing to happen to humanity since paper money. It has not only revolutionized the way we think about such esoteric subjects as trust and security, but it has also made many people rich in the past decade since it was created by the mysterious Satoshi Nakamoto.
You can make a lot of profit with bitcoin. Even if you’re not the investing kind, which would be unfortunate, you can still use it to pay for things since more vendors around the world are accepting bitcoins as a form of payment. There are plenty of people making rookie mistakes with their bitcoins. Don’t be one of those people.
Some of the errors people make with bitcoins are minor errors, costing them nearly nothing and easy to correct. Others are the kind of errors that lead an investor to lose their shirt and finding themselves on the street.
1. Investing in Something You Don’t Understand
This is one of those rules that seem obvious at first glance. Ask any logical person, and they’ll tell you it’s silly to invest in something you don’t understand. Yet nowhere is that truth more crucial than in the world of cryptocurrencies. Here, you could make and lose a fortune in seconds simply because the market is volatile. That risk is magnified by many orders of magnitude when you have no idea what you’re doing.
When it comes to cryptocurrency, knowledge really is power. Make sure you understand how the blockchain works, then how each currency, from bitcoin to the most obscure altcoin, implements the blockchain. Only then can you truly wield the power of crypto to its full potential.
2. Submitting the Wrong Wallet Address
This one is all too common. Many people are very excited about buying their first bitcoins. As a result, they rush to enter their wallet address without counterchecking to make sure they entered the right address. As a result, they commonly enter the wrong address, and the bitcoins go to a whole other person, or they disappear forever if the wallet doesn’t exist. Unfortunately, you can neither reverse nor trace such transactions.
The best way to prevent this from happening is to check the address thoroughly before submitting it. A good rule of thumb is to make sure the first three characters and the last three characters match with the address in your own wallet. You can even use the Find function in your browser to make sure the addresses are correct.
3. Not Waiting for Confirmation
You can buy a bitcoin in any one of many ways. Most people, however, prefer buying in person. It is a secure method, but you have to be very careful, especially when a deal seems too good to be true. To start with, you should never hand the other party your money until you have received confirmation that the transaction is complete. If you’re buying in bulk, wait for at least three confirmations.
4. Not Buying from Exchanges
Exchanges are not only user-friendly and quick, but they also offer competitive prices for the bitcoins that trade on them due to the forces of demand and supply. You will pay transaction fees to transact on an exchange. It’s totally worth it, however, especially if you think about all the other beneficial services offered by the exchange, such as a BTC profit review.
5. Using PayPal or a Credit Card
Sure, these options make buying bitcoins faster and easier, but they usually come with hefty transaction costs. If you want to save some of your cash and make the investment worthwhile from the onset, go for a bank transfer.
6. The Fear of Missing Out
Most people buy bitcoins to jump on the crypto bandwagon. They have a fear of missing out, so they rush in to invest in crypto without thinking about the timing. Sure, there are lots of benefits to bitcoin, but most people buy it to turn a quick profit, not because they are believers in the system.
Always have a strategy for what you do. Focus on the bigger picture. If you buy every time the market surges or sensational news comes on TV about bitcoin, then you will soon be a poor man. Instead, learn about trading strategies and learn deeply about bitcoin. This goes backs to investing only in what you understand. That’s how you leverage bitcoin and get rich off of it.