Don't Make These 6 Mistakes Most New Bitcoiners Make

Bitcoin has reshaped our understanding of financial systems and what value exchange can be in a digital age. Despite its remarkable popularity, many new fall into several common traps. Here are 6 common mistakes that people new to Bitcoin often make.

Mistake #1 - Not Educating Yourself

One of the most significant mistakes newcomers to Bitcoin can make is failing to continually educate themselves. With Bitcoin, continuous learning is a must.

Newcomers often enter the field with an initial burst of curiosity, learn a few basics, and then cease to expand their knowledge. This stagnation in learning can lead to a multitude of other mistakes. For example, without ongoing education, new Bitcoiners may struggle to understand emerging trends, assess new developments, or make informed decisions about their Bitcoin holdings.

A great start is to check out our previous article on 10 must-read Bitcoin books:

10 Must-Read Bitcoin Books

As Bitcoiners, we strive to expand our knowledge of the decentralized currency when we can. Reading Bitcoin-related books is one of the best ways to increase your understanding of Bitcoin, the current fiat system, and how Bitcoin is a better option as a global currency. Below are 10 popular Bitcoin

BitByteBailey Jakob

Mistake #2 - Trying to Time the Market

Another common error is trying to time the market. Predicting short-term price movements in the Bitcoin market is a fool's errand. The price of Bitcoin can be volatile, driven by myriad factors such as macroeconomic indicators, regulatory news, and market sentiment. Even experienced traders often struggle to consistently profit from market timing.

Instead, consider a strategy known as dollar-cost averaging (DCA). By investing a fixed amount into Bitcoin at regular intervals, you mitigate the risk of buying at a peak. This strategy removes the emotional aspect of investing, reduces the impact of volatility, and can lead to solid long-term returns.

Mistake #3 - Not Self-Custodying Your Sats

Exchanges are popular platforms for buying and selling Bitcoin, but leaving your holdings on an exchange can be risky. You're essentially entrusting your Bitcoin's security to a third party. If the exchange is hacked or goes bankrupt, you risk losing your Bitcoin.

Taking full custody of your Bitcoin means transferring it to a private wallet, where you control the private keys. By doing this, you maintain total control over your Bitcoin. It aligns with the very essence of Bitcoin - eliminating the need for trust in intermediaries. There are various types of wallets available, including hardware wallets, which offer robust security by keeping your private keys offline.

Head to our previous article below to see the top 5 options for self custody:

5 Hardware Wallets That Won’t Share Your Seed Phrase With 3rd Party Companies

Ledger, a renowned manufacturer of hardware wallets, recently unveiled a contentious new feature named “Ledger Recover” for its devices, sparking substantial debate within the cryptocurrency community. The said feature, an optional system available on the Ledger Nano, is engineered to assist users…

BitByteBailey Jakob

Mistake #4 - Wasting Time With Altcoins

Diversification is typically a wise strategy in traditional investment realms. However, in the world of cryptocurrencies, investing in altcoins (cryptocurrencies other than Bitcoin) more often than not lead to undesired outcomes. Many newcomers are lured into purchasing altcoins due to their lower price compared to Bitcoin, expecting higher returns. Additionally, the altcoin community is riddled with scams - which so many newcomers become victim to.

Bitcoin's network effect, security, proven resilience, and growing adoption worldwide are factors that most altcoins simply cannot match. Many altcoins lack the transparency, community support, and developer talent seen in the Bitcoin ecosystem.

Mistake #5 - Not Using and Spending Your Bitcoin

A major mistake that newcomers often make is treating Bitcoin solely as an investment tool and not utilizing it as a digital currency. Bitcoin was created to be a decentralized digital cash, and to fully appreciate its potential, it's crucial to use and spend it.

Many holders simply buy Bitcoin and hold onto it, hoping for it to appreciate in value. While this "hodling" strategy has been profitable for many, it misses the essence of what Bitcoin was designed for - to be a peer-to-peer electronic cash system. Bitcoin isn't merely a digital asset; it's a revolutionary new form of currency.

Spending Bitcoin contributes to its wider adoption. The more people use Bitcoin for regular transactions, the more normalized it becomes, encouraging more businesses to accept it and more people to start using it.

Fix the #Bitcoin adoption dilemma with SPEND and REPLACE. pic.twitter.com/4dxcVS2DEg

— Carl ₿ MENGER ⚡️🇸🇻 (@CarlBMenger) April 20, 2023

Spoiler: if you spend and replace your #bitcoin at the end you're still hodling. pic.twitter.com/kRa9kB8pWK

— Bitcoin explorers (@btcexplorers) April 21, 2023

Mistake #6 - Not Getting Involved in the Bitcoin Community

It's worth emphasizing the importance of active involvement in the online & IRL Bitcoin community. Simply observing from the sidelines is a common mistake that many Bitcoin beginners make.

Bitcoin communities serve as rich information hubs where enthusiasts can share knowledge, discuss trends, debate about the future of Bitcoin, and collectively navigate the complexities of the Bitcoin universe. Communities like the Bitcoin subreddit (r/Bitcoin), Bitcointalk.org, Twitter, and Nostr, among others, are vibrant, diverse, and rich with insight and expertise.

Becoming an active participant, rather than a passive observer, in these communities opens up even more learning opportunities. Engaging in discussions, asking questions, and sharing your perspective not only broadens your understanding but also allows you to contribute to the community's collective wisdom.

Final Thoughts

Bitcoin represents a fundamental shift in how we perceive and use money, and understanding it deeply can open doors to a whole new perspective on finance and personal freedom. So, invest not only your money but also your time into learning about this revolutionary technology.