One of these is where and how to buy Bitcoin. You’ll be glad to know that there are many places online that now offer Bitcoins for sale. You can even check out online marketplaces that would connect you to vendors and sellers.
But of course, that’s not all that you have to do.
After you’ve purchased the Bitcoin, there are certain things that you need to do, as well as those that you cannot do.
In this article, we will discuss the things that you cannot do after you’ve bought Bitcoins. This is something that both beginners and seasoned Bitcoin users should know about.
What Not to Do # 1 – Do not announce that you’ve purchased Bitcoins
After you’ve bought your first Bitcoin, you can’t help but feel excited about it.
And because of this excitement, you want to share the news with your family and friends.
You’re even thinking of making an announcement on your Facebook that you’ve gotten into the Bitcoin bandwagon.
But stop yourself from doing so.
Yes, the excitement can get to you but you need to remember that investments should be confidential.
You should treat your Bitcoin investment the same way you treat your investment that involves real money.
While it’s perfectly fine to give advice and strategies about investing in Bitcoin so you can help those who are starting out, you should not announce the details of your investment.
Here’s a situation that is worth considering:
A man named John bought 100 Bitcoins back in 2011. At that time, this number of Bitcoins was only worth $10. But six years later, the investment has become a lot more valuable. It is now valued at $400,000. If John had told his friends in 2011 that he had 100 Bitcoins, some of them would have probably shared the story with other people they know. The news can spread, and by this time, many people would know the fortune that is in the hands of John. Even if John only shared the news with his most trusted friends, he is not so sure about the other people who have gotten hold of the story as well.
It’s not unlikely that people are going to want to get their hands on this fortune. Some would even resort to using force to get John’s Bitcoins from him.
So if you want to keep yourself and your Bitcoin investment safe from the bad guys, you should keep details about this to yourself.
You need to keep in mind that since Bitcoin is not regulated or controlled by the US government, there is no authority to protect you. Your security depends on your hands.
You might find it hard to believe but there has been a rise in crimes related to cryptocurrency so you need practice safety precautions.
What Not to Do # 2 – Do not store your Bitcoins in exchanges
If you are like most Bitcoin investors, you would probably buy your Bitcoins from any of these popular cryptocurrency exchanges:
If you must know, these are reputable cryptocurrency exchanges that are being used widely by so many people.
Many of these offer free digital wallets where you can keep and store your Bitcoins.
But it’s important that you do not keep your Bitcoins in these free digital wallets for more than two or three days.
It is absolutely necessary to transfer the funds to your own digital wallet as soon as you can.
You might be wondering what the problem is, since these are reputable exchanges anywaty.
But again, it has something to do with the fact that Bitcoin is not yet regulated by the government, which means that the security of your funds in these exchanges are not protected or insured.
In the event of problems like hacking or shut downs, you will lose your Bitcoins and never retrieve them again.
If you find this hard to believe, conduct a research about the Mt. Gox scandal.
Mt. Gox was a famous cryptocurrency exchanged that got hacked. You can guess how it ended for the users of this platform. Some of them lost millions of dollar worth of Bitcoins.
This scandal was not the first, and definitely not the last.
It’s true that exchanges are doing everything in their power to protect their systems and prevent hackers from penetrating. But you can never know for sure.
Once your Bitcoins are gone, you can never get them back again.
Of course, this is something that you never want to happen.
So you’ll probably want to ask where you should store your Bitcoins instead.
If you want to hold onto your Bitcoins for a long period, you need to get a hardware type of digital wallet such as the Ledger Nano S. This costs about $70 to $90. This is one of the most secure ways of storing your cryptocurrency.
But if you plan to hold a small amount for a long time, you can make use of mobile digital wallets such as Coinomi or MyCelium.
It’s a must that you keep your private keys securely whatever type of digital wallet you’re using.
An alternative option would be to create your paper wallet. It’s interesting that a digital currency that’s so advanced in technology is best stored on a piece of paper. But you need to know how to create one. This also takes time and requires technical knowledge.
What Not to Do # 3 – Do not monitor the prices of Bitcoin every minute
Some Bitcoin investors have become so obsessed with their investments that they don’t do anything with their time anymore but to monitor the prices of Bitcoin at every minute.
But this is never a good idea.
If you get hooked on Bitcoin and you find yourself doing this, you need to stop immediately. You don’t want this to be a habit.
You need to treat your Bitcoin investment just like any other type of investment. There’s nothing wrong with monitoring the price, but you don’t have to do it so frequently that you are no longer able to live your life.
Also, keep in mind that if you monitor the Bitcoin prices too frequently, you might end up making irrational decisions. For example, if the Bitcoin goes down, you might panic and end up selling all of your Bitcoin.
Since cryptocurrency is a highly volatile market, this can be a huge mistake to make.
Too frequent monitoring of Bitcoin prices will only create stress and anxiety.
What you need to do is to check Bitcoin prices only once or twice a week. Do not get too anxious with short-term fluctuations and focus more on long-term benefits.
But of course, it’s a different story if you’re a day trader.
To monitor the prices effectively, make use of apps such as CoinCap, which you can set up to notify you when there are changes in prices or when the Bitcoin value reaches your target. You can forget about monitoring Bitcoin prices too frequently because you will just have to wait for the app to notify you.
What Not to Do # 4 – Do not let your spouse know right away
You may or may not agree with this one, but at least hear this advice.
After you’ve bought your Bitcoins, for sure, you’re excited to let your spouse know about it.
But you have to wait awhile and see how the investment goes.
You don’t need your spouse worrying about something that you’re not yet sure if you’d be doing for a long time.
Once the Bitcoins have started to gain the profits that you’re hoping for, you might consider telling your spouse about it.
You also have to consider the fact that the divorce rate goes higher and higher each year.
This does not mean to say that it will end badly between you and your spouse but you just have to keep an open mind about it.
If you’re worried about what will happen to your Bitcoin funds if something bad happens to you, what you can do is to create a step by step procedure on how to access your Bitcoin. But this should only get to the hands of your spouse in case of an unfortunate incident.
What Not to Do # 5 – Don’t let anyone know what your recovery phrase is
The recovery phrase refers to the 12 to 24 word long seed words that you will use to set up your cryptocurrency wallet.
Experts will always tell you to keep this recovery phrase secured.
If you want to entrust the recovery phrase to another person, what you should do is to give half of it to one person you trust, and the other half to another person you trust.
But do not let the two know that they have the other half.
Now if you can keep the recovery phrase to yourself, then it would be better.
Another option is to hide one half of the recovery phrase in one place, and the other half in another place. Be sure that both places are secured.
Then you can give access to the place to a trusted person, and the other place to another person.
Ideally, these two people should not know each other.
More and more people are joining the Bitcoin revolution. If you want to be part of it, it’s important that you do extensive research about it first before you make your investment so you know exactly what to do (and what you cannot do).
These mistakes can be costly on your part so you need to avoid these as much as possible.