Bitcoin is certainly a fresh decentralized technology that works differently than every other system you’ve previously used in the past.
If you just got involved in Bitcoin or perhaps you’re thinking about it, there are specific things to bear in mind.
One has to be cautious when using it because there’s no central authority to “reverse” your mistakes.
Below is the list of 8 things that will really help you survive in this exciting new space.
1. DON’T allow others to store your bitcoins
Many Bitcoin newcomers have the habit of keeping bitcoins in online wallets where they bought their coins. This is a very bad idea for 2 reasons:
Online services run off with your coins all the time
Online services get hacked constantly
There is a very crucial rule to remember:
You only possess bitcoins when holding the corresponding private keys.
2. DON’T invest more than you’re willing to lose
Bitcoin is a fairly new technology that is now being tested in real-world situations. Like any other tech, it may take off or it may break down.
It might seem like a good idea to buy with all you have because Bitcoin’s past explosiveness has made many people rich, but it has also made many people equally poor.
When you are 26 years old with no kids and no wife you can afford to succumb 50% of your wealth in trading cryptocurrencies or for example to exchange Bitcoin to USD here on a bitcoin service site. But it’s more painful with a family and mortgage that’s around your neck.
3. DO take time to explore wallet options
There are many different wallets that range from really secure to very convenient. Picking the right one to store bitcoins is a very crucial decision to make.
Are you more likely to spend your coins? If that’s the case, you might choose to store your coins in a PC or smartphone wallet which is easy and convenient to use but provides less security.
If you, on the other hand, prefer to store bitcoins securely, a hardware wallet such as Bitcoin Trezor might be the right option.
Think about the ways you intend to use Bitcoin and choose accordingly.
4. DO back-up your wallet
Your computer or mobile phone may malfunction anytime and as a result, you won’t be able to gain access to your coins. Coins that can’t be accessed are considered lost forever.
If you back-up your wallet you might avoid the loss and restore your wallet at any point in the future.
5 DO password protect
If a wallet offers password protection make sure to use it.
This feature encrypts a wallet file (e.g. wallet.dat) which stores private keys and any type of metadata that may damage your privacy if leaked.
Even when an attacker hacks into your computer and gets hold of this file, it will be useless because it’s encrypted and can’t be used without having the password.
Just make sure you use a strong password which is difficult to guess/crack.
You test a handy tool.
your browser and nothing is sent to, recommend you to go offline before testing it.
6 DON’T store a lot of bitcoins on your PC/mobile
Operating systems are vulnerable to all kinds of bugs. Out-of-date operating systems which are the reality for many non-tech users a lot more so.
With public exploits lying all around the web, it’s easy to hack such systems. Not only you must update your OS on a regular basis, but you also should not rely on it with big amounts.
If you feel uncomfortable to walk around with $200 in your pocket, you might also feel uncomfortable to keep $200 worth of bitcoins in your phone wallet.
If you feel uncomfortable to leave $1000 at your desk, you should implement the same practice to your computer wallet.
7 DON’T fall for online scams
Bitcoin world has seen a tremendous amount of brand new users coming to the ecosystem. This always attracts all kinds of fraudsters that target clueless newbies.
One of the most common online scams is a “Bitcoin doubler”. Operators of this kind of Ponzi scheme say to give you back 5%, 100% or even 200% on your deposits within a very short amount of time.
A scammer might deliver on the guarantee if you take part in the system in the beginning (I once made 200% on my bitcoin deposit in 10 days), however, sooner or later he will run away with your cash.
Bitcoin is a fairly unregulated world and nobody will listen to you crying when you lose your savings.
If a specific thing looks too good to be true, it probably is.
8 DON’T reuse your wallet addresses
Since Bitcoin is not anonymous and its blockchain is publicly accessible, it’s strongly advised against reusing wallet addresses.
When making use of a single address for several transactions it connects to all yours and any individual’s future transactions. This link after that could be used in a taint analysis to jeopardize everyone’s privacy and security.