Using Bitcoin for the first time can be a challenge for most people. Discover practical safety tips for a beginner.
Bitcoin has become a viral phenomenon around the world, mainly used as a means of payment and as a store of value. Several global industries have embraced bitcoin, allowing businesses and individuals to purchase various goods and services with bitcoin. Institutional investors are also increasingly investing in Bitcoin to diversify their wealth and hedge against inflation.
Bitcoin is currently the hottest cryptocurrency, but it is still a new invention that most individuals are unaware of globally. That’s why using it can be a bit difficult for beginners. The following article highlights essential security tips for Bitcoin beginners.
Keep separate wallets
Bitcoin users need a cryptocurrency wallet to store private keys to authorize transactions. The network does not limit the number of wallets one can own. Each wallet generates a unique public address that serves as an account number for sending and receiving payments.
By keeping separate wallets, it’s hard for bad actors to track your transactions, which ensures better privacy. Having separate wallets will also ensure that you don’t lose all of your funds in the event of a cyberattack.
You can create as many wallets as you want based on your Bitcoin transactions. For example, you can have separate wallets for receiving payments and spending Bitcoins and savings.
Store your Bitcoins cold
Bitcoin allows users to choose between hot and cold storage of their funds. Hot storage options include online wallets, mobile wallets, and desktop apps. They are very convenient as users can access their funds and transact from anywhere.
However, Bitcoin hot storage also presents many cyber threats, including hacking and theft. Cold storage is disconnected from the internet, giving users an extra layer of protection against online threats. Storage options contain USB sticks or other hardware.
However, cold storage is only ideal for holding Bitcoins for the long term.
Use trusted cryptocurrency exchanges to transact Bitcoins
Cryptocurrency exchanges are undoubtedly the most convenient marketplaces for transacting Bitcoins. They mainly support cryptocurrency trading, buying and selling cryptocurrencies for profit. Major exchanges have special features such as the BitIQ app that traders can program to buy and sell crypto in their absence.
Cryptocurrency exchanges also generate payments on behalf of businesses and individuals. Some even offer asset management services for crypto investors. Nonetheless, using a trusted cryptocurrency exchange will allow you to offset most of the common challenges encountered when trading Bitcoin. However, cryptocurrency exchanges charge a small fee for their services.
Observe security and privacy precautions
Most individuals often take standard precautions, but this is a mistake you should never make. The Bitcoin network has strong security and privacy provisions, but users must also agree to additional measures.
For example, you should never share your private keys with potentially making your wallet vulnerable to theft and other risks. Although Bitcoin does not reveal the real identity of users, there are various ways to track transactions and discover the identity of those behind the various wallets.
It is therefore advisable to use mixing services to hide transactions with you do not want to have a link at all times. Some people and agencies are increasingly associating cryptocurrencies with illegal activities, including money laundering, fraud, tax evasion, drug trafficking, and terrorist financing.
Therefore, you should also avoid using Bitcoin for illicit transactions, as this will bring you serious consequences from law enforcement authorities. Bitcoin is still in its infancy, and there are several things about it that we don’t know yet. However, the article above has removed essential guidelines that any Bitcoin newbie should follow when using it to pay for products and invest.