5 minute read.

Bitcoin has reshaped our understanding of financial systems and what value exchange can be in a digital age. Despite its remarkable popularity, many new Bitcoiners fall into some 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.

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.

Buying $50 of Bitcoin every week starting 4 years ago would have turned $10,450 into $14,648 (+40%)

dca bitcoin

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.

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.

bitcoin only

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.

spend btc

hodl spend

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.


Wow, top.

Good article. In fact, you can add more points with errors endlessly.) Different people make different mistakes, which even an experienced bitcoiner may not think about immediately. Learn yourself and teach newcomers. There must be more of us

Thank you!

Yeah, could write tons of common mistakes - the key thing for any Bitcoiner is learning on the way. As you progress down the endless Bitcoin rabbit hole, you will face new obstacles and mistakes