A novice trader can make many mistakes when buying bitcoin in 2021. Moreover, any of these mistakes can be fatal and lead to a loss of money. So, for example, buying bitcoin quickly with your debit card without setting things right can lead to the risk of transferring funds to a website created by scammers, overpaying for coins due to an inflated rate or commissions, entrusting assets to an unreliable platform.
5 Things to Know Before Buying Bitcoin in 2021
All this can be avoided if you have a basic knowledge of transactions with cryptocurrencies and follow simple rules. We have prepared a list of recommendations and tips for you to help protect yourself as much as possible when buying bitcoin in 2021.
When buying bitcoins, do not use unsafe services
It can cost you a lot, and not just figuratively. Scammers create websites and cryptocurrency exchanges with the sole purpose of stealing user funds. If you transfer money to them, most likely, you will have to say “goodbye” to it.
Another problem is high fees and overvalued rates. A doubtful service can sell you cryptocurrency at an inflated price or with a hidden commission. In this case, there is a risk of losing 5-10% of the invested funds.
To reduce this risk, it is better to look for a suitable broker or exchanger through special data aggregators. For example, on websites coinmarketcap.com and coingecko.com you can sort exchanges by trading volume. As a rule, the higher this indicator, the more reliable the platform is.
Ensure the security of your device
Viruses and browser extensions from infamous developers can replace the addresses of cryptocurrency wallets on the pages of any site. Therefore, the more online security apps you use, the better.
When working with digital assets, you should abandon the TOR browser. Some of the output nodes of this browser belong to attackers, and they can substitute wallet addresses on the sites of exchangers and exchanges.
Before buying a cryptocurrency, choose the right place to store it
Experts at Coingate believe that the most important thing before buying bitcoin is to think about its safe and convenient storage in advance and decide which wallet to use.
This can be a custodial service, such as a currency exchange or an e-wallet. By using them, you formally entrust them with the management of your coins. Therefore, it is important to choose a well-established platform that can be trusted with financial transactions on your behalf.
Invest only the money that you don’t mind losing
Over the last two years, the cryptocurrency market has been in a growth phase. During this period, Bitcoin has risen in price almost 6 times, and Ethereum – more than 8 times. But growth can change at any time to a long-term decline.
For example, after reaching $20 thousand in December 2017, the Bitcoin exchange rate declined throughout the year. Bitcoin rose above the previous record only three years later, in December 2020. Therefore, it is important to invest in cryptocurrency funds that will not be needed in the near future.
Bitcoin is less anonymous than it seems
Bitcoin is known as the currency of the “black” market: it is not associated with bank accounts, information is not available to the authorities. But the blockchain is a public registry of every transaction in the system. Any user can see where and to whom each bitcoin belongs at any time.
The information is anonymous: it is clear that bitcoin is associated with a certain wallet, but it is not known whose it is – until bitcoin is transferred to money. In this case, all information about the trader will be publicly available.
Bitcoin, since its appearance in 2009, was raved about by enthusiasts, and the general public was not so optimistic. As time has shown, this cryptocurrency is one of the most reliable financial assets on the stock market. Many brave traders have already managed to make millions of dollars on bitcoin. Who knows, maybe it’s your turn to get rich?