There are a lot of mistakes that can be made when buying bitcoin. From using a poor exchange to not having the right information, you need to be aware of these mistakes before they happen. Here are five rookie mistakes you can avoid.
- Using the wrong wallet
There are many types of wallets out there, but most beginners start with a software wallet or an online wallet. The problem with these wallets is that they’re vulnerable to hacking and theft. If your computer crashes, then all of your coins are gone forever! Most people buy bitcoin from exchanges like Coinbase, which charges a 1% fee and requires customers to verify their identity with government-issued ID, submit a photo of themselves with that ID and link their bank accounts to the site. Buying too much at once or selling too soon after buying an asset can result in big losses for new traders as well as seasoned ones who don’t understand how markets work.
That’s fine for transactions worth a few hundred dollars or less, but it’s not really necessary for people who want to buy bitcoin as an investment or as part of a larger business deal. Coinbase has some of the highest fees among bitcoin exchanges; other sites charge as little as 0.25% per transaction. And while it’s possible to buy fractional amounts of bitcoin (anywhere from $2 worth up over $10,000), most exchanges don’t let customers buy small amounts because they’d have to perform too many microtransactions at once — too many moving parts mean higher fees for everyone involved. However, CoinSpot: BTC Wallet, is one of the best wallets in the industry.
- Not using two-factor authentication (2FA)
Two-factor authentication is one of the best ways to protect yourself from hackers and other scammers on exchanges like Coinbase or Bittrex. It requires multiple steps before accessing your account, which makes it harder for criminals to gain access to your funds in case they steal your password or private key by accident (which has happened before).
- Not knowing the difference between fiat currency and cryptocurrency
Cryptocurrency is different from fiat currency because it doesn’t have any physical form like dollars or euros do. This means that it’s even more important to keep track of where your money is going!
- Not knowing what you want from the market
Like any other investment asset, you need to know what your goals are before you start trading. If your goal is long-term investing, then buy and hold. If you want to trade in and out of positions quickly, then go for a more active approach.
- Not using a secure wallet or exchange
You need to store your crypto somewhere safe where no one else can get access to it — this is why some people keep their cryptocurrencies on hardware wallets or in cold storage. There are also exchanges that offer their own wallets and insurance against theft (like Coinbase). While these services may seem convenient at first glance, they pose additional risks that come with relying on a third-party service provider. This means they can also be hacked and your funds stolen — just like traditional banks!
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