Most Bitcoin transactions go without a hitch. However, at some point, most people have made at least one mistake when buying Bitcoin – even those who consider themselves more experienced. Fortunately, you can learn from the mistakes of others and enjoy a more stress-free Bitcoin purchase by taking note of the following 5 mistakes to avoid when Buying Bitcoin:
- Inserting the wrong address
It’s such an easy mistake to make. You’re excited about receiving your Bitcoin and you rush to enter your wallet address and end up inserting the wrong address. The design of Bitcoin is such that a transaction cannot be reversed and the Bitcoin is therefore lost forever. The most obvious way to prevent such a problem is double and triple checking an address beforehand.
Another option is to check the first and last 3 characters of your address and see they match. You can also use the “find” function in your browser to make sure addresses match. If you’re cautious enough, you’re very unlikely to make such a mistake.
- Not waiting for enough confirmations
There are many ways to buy Bitcoin and one of them is to buy it in person. If that’s something that appeals to you, make sure you take all of the necessary precautions. For a start, don’t hand over any money until the transaction has completed and you’ve received multiple confirmations.
While one confirmation is better than none, you should aim to have at least 3 confirmations, particularly if you’re buying a large amount of Bitcoin. Waiting for confirmations reduces the risk and will provide some peace of mind.
- Buying from services that have an exchange
One of the most popular places to buy Bitcoin is Coinbase. That’s because it’s a user-friendly digital currency service. However, people who buy on Coinbase tend to pay a premium for the convenience of this service when they could pay a lot less by trading on a Bitcoin exchange. Indeed, Coinbase has its own Bitcoin exchange called GDAX. There are now many cryptocurrency exchanges that also supply premium buying services. Some examples include CEX.io and Bitstamp.
- Paying via PayPal or credit card
There’s no doubt that buying Bitcoin via PayPal or with a credit card or debit card makes the process quick and easy. However, such a level of convenience usually comes at a price with higher fees to reflect this (due to chargeback issues that may occur). It’s well worth taking the extra time to buy Bitcoin via a less expensive payment method such as bank transfer, particularly if you’re buying a large amount or making regular purchases. After all, who wouldn’t want to pay less in fees and have more Bitcoin and altcoins in return?
- Buying due to FOMO
One of the biggest mistakes that cryptocurrency traders make is buying with fear of missing out (FOMO). For example, there may be very positive news surrounding Bitcoin and people then buy when it’s too late and the price already reflects the latest developments. Of course, if you believe in Bitcoin then it may not matter when you buy it long-term, but try to have a strategy and focus on the bigger picture rather than reacting to news and potentially buying higher than you need to. This goes for all cryptocurrencies. If anything, it’s often better to buy when FUD (fear, uncertainty, and doubt) is setting in as that’s when you get the lowest prices.
It’s becoming easier to buy Bitcoin with plenty of Bitcoin exchanges and payment methods on offer. Everyone makes mistakes but you don’t need to make mistakes when it comes to buying Bitcoin! If you follow the above advice, you can save yourself some money and some stress as well!