When buying bitcoin, there are a number of ways you can do it. But whichever method you chose, you should take all the necessary precautions. Below we will look at four mistakes you should avoid when making your first purchase.
- Failing to do your own research
This is the first step that every newcomer should take. Many people rush to buy bitcoin and other cryptocurrencies without really educating themselves on what they are all about. Getting a basic understanding of bitcoin helps you make informed decisions. You can learn about bitcoin and other cryptos by joining relevant communities on Facebook, Reddit, and Twitter.
- Rushing to make purchases due to FOMO
Fear of missing out (FOMO) is one of the major factors that drive many newcomers into cryptocurrencies. Many will buy in when there is positive news around the crypto market and this already reflects on their prices. The prices are usually higher but if you believe in bitcoin and you are a long-term holder then it doesn’t matter. The secret is to focus on the bigger picture instead of reacting to news where you make purchases at a price that is higher than you need to. Usually, the best time to make a purchase is when there is less FUD in the market as you will get the best rates.
- Avoid inserting the wrong address
When starting out buying bitcoin you are excited about making your first purchase and many people rush over entering details. You rush entering your wallet address and you end up entering the wrong address. Since Bitcoin transactions can’t be reversed this means your money is lost forever. You can avoid this mistake by ensuring you double check the address before entering it.
- Storing your bitcoins in an exchange
This is a mistake most rookies are bound to make. The problem is once you store your bitcoins in the exchange you basically end up giving up control over them. In case of a hack or fraud, like we have seen with a number of exchanges like Mt.Gox and Coincheck you end up losing all your bitcoins. It’s advisable once you make your purchase you should move them out of the exchange to your own secure Bitcoin wallet.
By following the following steps you are sure to be on the safe side when it comes to buying bitcoin.
What other safety measures can one take when buying bitcoin? Let us know in the comment section below.