Before you start using Bitcoin, it is recommendable to get to know the basics of Bitcoin. Don’t worry, it’s not hard. Save yourself a lot of money and headaches and avoid these common mistakes. Don’t be attracted by noise from other cryptocurrencies, money making and lamborginis. Chances are you will get lost in your journey. There is a saying among bitcoiners, and it becomes more truthful and apparent as time goes on: You don’t change Bitcoin. Bitcoin changes you.
The ‘crypto’ space is awash with alternative currencies, so called ‘decentralised finance’ applications and some down right scams. It can be very tempting to get involved with these projects because they have lots of buzz words and look ‘cheap’ compared to bitcoin. Almost all of these projects are nothing more than marketing and buzz words and should be explored with caution.
Buying KYC bitcoin
Buying KYC bitcoin from the likes of Cash App is a very fast and easy way to purchase bitcoin. We aren’t saying that you absolutely shouldn’t do this but we want you to know the trade offs. When you sign up with these companies you will need to supply some form of photo I.D which tags the bitcoin you buy to your public identity. Due to the public nature of the Bitcoin blockchain, surveillance firms can ‘follow’ you and watch your future transactions.
Not exploring other purchase options
So you don’t like the sound of KYC’d bitcoin, what are the other options? The are Peer to Peer exchanges such as Bisq and HodlHodl which use an escrow service to allow you to buy bitcoin from someone anywhere in the world, however these generally aren’t as easy to use as the KYC alternatives By far the easiest option to get yourself started it to buy some off a friend or family member. Ask around, there’s more Bitcoiners out there than you think!
Not running a node
Simply, if you aren’t using your own node then you are using someone else’s, wether you know them or not. That’s how Bitcoin works. Having a wallet connected to your own node means you don’t rely on anyone else to transact which gives huge privacy benefits. By using your own node you can also be confident that the data displayed in your wallet is accurate and abiding by your nodes ‘Bitcoin rules’.
Leaving bitcoin on exchanges
Yep, we bought KYC bitcoin and because we didn’t know how to operate a wallet we left it on the exchange. If you have bitcoin on an exchange, you don’t have bitcoin. You have an IOU and you should learn enough (with our help hopefully) to get that bitcoin off the exchange and into a wallet that you control the private keys of. There have been multiple exchange hacks in the past and people have lost large amounts of bitcoin, don’t let that be you.
Sending someone your private keys
Thankfully we have never fallen for this one but many people have. It is quite common in public chat groups such a telegram for scammers to impersonate someone from the Bitcoin community offering support to someone that may be asking for help. NEVER…..EVER give your private keys or seed words to anyone, especially on the internet.
Storing seed words insecurely
Your seed words are the keys to your bitcoin, anyone with control of these can access your funds. You should store these in a secure manner, but be mindful that you don’t store them so securely that you forget where they are. Believe it or not, it happens. It’s not a good idea to store them on your computer.
Sending to the wrong address
Thanks to scannable QR codes and error detection features being implemented into wallets, these days this is becoming quite difficult to do. Bitcoin addresses are long strings of numbers and letters so its always good practice to use QR codes or at the very least copy/paste when sending to someone. It’s also good advice to visually check the address at least once before sending.
The more you learn, the more excited you get about Bitcoin. Still happens to us now! This can be compounded if you spend time on the likes of Bitcoin Twitter and it’s very easy to get over excited and buy more than you can afford. Bitcoin is a young and extremely volatile asset, you should do your own research and never buy more than you can afford to lose. There is a saying in the community which is a very good rule to live by… ‘Stay humble, stack sats’.
Trying to trade
Bitcoin is extremely volatile, its not unusual to see a 20% price swing in either direction in a single day. If you aren’t experienced and you try to play these markets, you WILL lose money. Tread carefully.
Not asking for help
Bitcoin lives on the internet which, much like the real world is full of people willing to take your stuff. Talking about owning bitcoin online or in the real world can quite literally post a target on your back for thieves or scammers. A common approach for people who interact with the online Bitcoin community is to create an online persona completely separate from their real world identity.
Not using 2FA
Everything we do online these days comes with an account linked to our email. If your email account becomes compromised it can be an open door into your life for a scammer.Two factor authentication provides and extra security layer to protect you from being hacked. Avoid using the SMS version and opt for an app or key based one. Common examples include Authy or Google Authenticator.
This article is written by Bitcoin Q&A and was first published on bitcoiner.guide. The guide brings you the necessary know how on everything related to bitcoin, security and privacy