Critical Mistakes to Avoid When Purchasing Bitcoin
Many individuals have made millions trading Bitcoin. Anyone who invested $100 when Satoshi Nakamoto introduced this virtual currency in 2009 now holds Bitcoin with millions. However, some people have lost a lot of money trading or investing in Bitcoin.
For instance, some individuals have bought Bitcoin at a higher price and sold it low. Others have lost money through scams and losing their digital wallet keys. Some individuals have also fallen victims to scams. Essentially, you can lose money in many ways when dealing with Bitcoin. To ensure your safety, avoid these critical mistakes when purchasing Bitcoin.
Not Giving Security Priority
Before you purchase Bitcoin, bear in mind that you won’t get your cryptocurrency back if you lose it. Therefore, prioritize security whenever you opt to buy Bitcoin. This electronic currency eliminates intermediaries in financial transactions. It uses blockchain to validate all transactions while enabling users to pay for services and goods. And you don’t go through a financial institution like a bank when using Bitcoin.
People use private and public keys to access their Bitcoin. Losing those is one of the ways you can lose your money. That’s because Bitcoin transactions do not involve a bank or any other institution. Therefore, you won’t have anybody to call to resent the password to allow you access to your Bitcoin. And if somebody else gets the keys, they can control the funds in your digital wallet.
To ensure your Bitcoin security, try these essentials:
- Use a reputable crypto exchange: A key factor that attracts most people to Bitcoin is the technology that makes the network difficult to hack. But, criminals can hack a crypto exchange where people purchase Bitcoin. What’s more, some crooks create fake crypto exchanges and then steal money from innocent users. Therefore, research the platform where you buy your Bitcoin. Use a platform like Immediate Edge that explains how it operates. Also, check the reputation of the crypto exchange before purchasing Bitcoin. If you notice complaints, go elsewhere.
- Use the right digital wallet: You use a digital wallet to receive and store Bitcoin. Instead of keeping Bitcoin on a crypto exchange, move your funds to a digital wallet that you can control. And you can choose a hot wallet or a cold wallet. Take your time to research different types of wallets to pick one that suits your needs while ensuring the safety of your Bitcoin.
- Protect your phone and computer: Ensure the security of the devices you use to purchase, sell, or trade Bitcoin. Use encryption, two-factor authentication, and passwords that criminals can’t guess. Also, protect the devices you use from viruses and malware.
Not Understanding Bitcoin Investment
Understand what Bitcoin is and the way it works before investing in it. Many people have read about Bitcoin on social media. Some adverts make Bitcoin look like a good and straightforward investment. However, you should understand many things about this virtual currency if you want to profit by purchasing and selling it. Therefore, research Bitcoin, investment strategies, scams, and other things to make wise decisions when buying and selling this virtual currency.
Investing All Your Money
You can make good money by purchasing and selling Bitcoin. However, this virtual currency comes with some uncertainty levels. Being a new digital asset class with high volatility and few regulations makes Bitcoin a risky investment. Therefore, don’t invest all your money in this virtual currency. Instead, invest an amount you can lose, and life goes on.
Bitcoin is undoubtedly a successful virtual currency. However, it comes with many unknowns since it’s a new asset class. Therefore, take your time to research and learn about it before investing. That way, you can make wise decisions when buying, selling, trading, or investing in Bitcoin.
This article has been published in accordance with Socialnomics’ disclosure policy.