The bitcoin ecosystem is open to anyone and everyone, regardless of their technical expertise regarding this matter. Novice users often find themselves dealing with a very steep learning curve, although this process has been simplified quite a bit. The following list of common mistakes highlights some of the problems novice bitcoin users have to deal with.
- LEAVING FUNDS ON AN EXCHANGE
One of the biggest mistakes novice bitcoin users make these days is keeping funds in an exchange wallet. Exchange service providers only exist to facilitate buying and selling of bitcoin, but they should never be seen as a wallet service whatsoever. Keeping funds in an exchange allows exchanges to exert control over user’s bitcoin funds. This should never be the case, as novice bitcoin users need to move funds off the exchange platform as fast as possible.
- BUYING AND SELLING BASED ON EMOTIONS
It is difficult to gauge when one should buy or sell their bitcoin bags. Most novice users trade based on emotions and input provided by other users. This is not the best strategy by any means, as traders often seek to manipulate novice users into doing their bidding. This also means people will tell you to buy or sell bitcoin at a specific moment, in the hopes of getting people to do exactly that. Novice bitcoin users should never trade based on emotions or panic, even though it is only normal to do so. Never be guided by your emotions when it comes to bitcoin trading.
- NOT RESEARCHING NEW SERVICES
Once novice bitcoin users gain access to the cryptocurrency industry, they have a plethora of services at their disposal. However, not all of these services are equal, as there are quite a few scams and Ponzi schemes floating around. Novice users always need to do their due diligence when looking into new bitcoin services before using them. Bitcoin transactions cannot be refunded by any means, and any money lost will be gone forever.
- NO BITCOIN WALLET BACKUP
Regardless of which device novice bitcoin users rely on to store their bitcoin wallet, creating a backup is of the utmost importance. Since users control their bitcoin funds, they need to take proper precautions to make sure they can be accessed at any given time. Most wallet solutions have a native feature to back up the bitcoin wallet with relative ease. A backup is an absolute must in the world of bitcoin wallets, and there is no reason not to create one.
- NOT REMEMBERING A WALLET PASSWORD
One thing most newbie bitcoin users get right from the get-go is how they enable password protection for their bitcoin wallet. This is a big step in the right direction, as without a password, anyone can easily hack one’s wallet. Such a scenario needs to be avoided at all costs, especially when considering it takes little effort to do so.
Unfortunately, this also brings us to one the most common problems for novice bitcoin users. A lot of people forget the password or passphrase they use to encrypt their bitcoin wallet. It is not uncommon for this to happen, although it poses a significant problem. Either note down the passphrase or save it in digital format on an offline device, just in case.
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