Nine tips on how to be a better Bitcoin broker
Digital currencies have become an established feature of the financial industry and an exciting alternative for portfolios. The industry leader Bitcoin is dominating the scene with over 180 billion euros in circulation. As tempting as it all sounds: beginners may find it difficult to make any headway. The competition is too big, the necessary resources too expensive and too many coins have already been mined. But even professionals can disappear from the crypto stage within seconds if they bet on the wrong coins, act rashly or overshoot the mark. The following tips should help you take your Bitcoin expertise to the next level.
Your Bitcoins belongs to you
Don't give up your Private Keys. Your Bitcoins will only be protected if they're safe. Too many users still share their coins with a trader, some stock exchange or with a third party – a beginner's mistake. Not only is currency safer in your hands, you alone have full control over your assets. Gerald Cotten demonstrated what can happen to a crypto exchange. Always save the private key offline in a Cold Wallet. A Paper Wallet is also okay, but more error-prone than a Cold Wallet. So-called cold wallets aren't connected to the Internet. Only those in possession of the actual physical wallet have access to it.
Use your own Full Node
Full Nodes are programs that fully validate Bitcoin transactions and blocks – in keeping with the Bitcoin ethos «don't trust, verify». They make sure that the network works and is secure. They accept transactions as well as blocks from other Full Nodes and reject invalid blocks. Thanks to these programs, you can submit your Bitcoin transactions directly to the network and receive a message if another transaction affects your wallet. Only a Full Node can eliminate uncertainties and safely store your Bitcoins. If there weren't enough Full Nodes, you'd have to use a centralized service – this carries the same disadvantages as third parties who manage your Bitcoins. Create and use your own Full Node, become a master of all your transactions and cryptos. You also support the Bitcoin community and make their network more secure.
One big family
Crypto currencies aren't a one-horse race. Community is necessary, team spirit is vital. The network works better the more users there are. For example, security is increased the more people use their own Full Node. Whether you're a beginner or a professional: take part in Bitcoin Seminars and Meetups. These aren't paid events by traders, but independent summits where the community meets and exchanges info. There are many smart people out there willing to share their Bitcoin knowledge with you. If it's at all possible and in compliance with current BAG guidelines, why not meet face-to-face with other Bitcoiners? There's just nothing like being in the same room as someone.
Private things should stay private
Keep your Bitcoins and other crypto assets to yourself – you don't brag about the money in your bank accounts either. If you want to tell someone about your crypto success, a clever investment or an insider tip, only tell people you trust. Just like in real life: envious individuals and rip-off artists are lurking everywhere. If you're already careful and betting on Bitcoin, don't risk all the safety that crypto offers you with inflated stories about your financial success.
Hands off Shitcoins
Shitcoins are worthless, as the name suggests. They're imitations seeking to profit off Bitcoin's fame. They often veil fraudulent schemes. Or they're just cryptos that have become worthless or have never really been able to develop their potential and probably never will. They're always enticing, just like diamonds in the rough. But in the long term, Shitcoins don't offer any added value. Even in the short term they are rarely marked by success. Once a copy of a Bitcoin, also called Altcoin, is created and doesn't bring about technological progress, innovation or financial value, it becomes a shitcoin and should be ignored.
Cryptomixers are essential
Crypto-what? Yeah, that's right, mixers. On the one hand, crypto currencies offer security as transactions are almost completely anonymized. But on the other hand, each of these transactions can be tracked by other Bitcoiners in the network if necessary. The cash flow within the Blockchain can be tracked and disclosed if required. Personal security and anonymity is also a protective mechanism against fraudsters who want to profit from the cover-up. If you move your Bitcoins via a Trader, for example, identification and other personal details are always required. Due to the growing success and the increasing number of miners, complete anonymity is no longer possible. For this reason, use Cryptomixer. These programs mix each of your transactions with a variety of other transactions – your own or others' – to ensure your privacy.
No traders and no stock exchange
Don't even try and trade your crypto. If you aren't incredibly lucky or somehow correct, you'll only fail. Want to quickly rise up the social hierarchy? That's not very realistic. Leaving your hard-earned Bitcoins to chance or self-appointed experts just isn't worth it. That's why I advise you to steer clear of Bitcoin Exchanges and the like. Wouldn't it be a shame if all the computing power you spent on mining was for nothing? Your energy balance is already severely compromised. Do you really want to throw money out the window? If yes, please do it some other way.
Don't live beyond your means
In order to not be tempted to sell or multiply your Bitcoins prematurely, you must lower the demand on your crypto assets. Just look at the value of time over gain for a simple explanation. Extremely simplified, the time value of money means that a monetary unit is worth more today than a monetary unit tomorrow. When looking at Bitcoin, this is exactly the opposite. Even though the same uncertainties such as yield, interest rates, bankruptcy or inflation play a role, the Bitcoin exchange rate has risen continuously since the introduction of the digital currency. Past lessons show that Hodling – and not selling or trading – is the «way to go».
Podcasts for the win
If you don't feel like or can't physically meet other Bitcoiners because of the Corona pandemic, then don't lose hope. There are some solid podcasts about crypto currencies and Bitcoins out there. Again, I'm not talking about sponsored ads by a trader, but discussions by experts from the Bitcoin community. I enjoy listening to Stephan Livera. The Australian – don't worry, the accent isn't too strong – co-founded the Ministry of Nodes, a blog for Bitcoin newcomers and professionals, and a partner of Bitcoin Ventures, a company specializing in funding promising Bitcoin companies and projects. He explains complicated concepts in an easily understandable way and gives valuable Bitcoin tips. Tales from the Crypt is also exciting. Host Marty Bent, who calls himself chief editor of the «best newsletter on Bitcoin», goes «deep down the rabbit hole» with his guests. Topics, people and cryptos are discussed, ranging from the rare to the unheard-of. Nevertheless, this podcast offers a completely new Bitcoin perspective. Plus, Marty is hilarious.
Do you know of any other tips, helpful gadgets or clever hacks that'll make you even more proficient with Bitcoin and other cryptos? Then let the community participate and drop us a comment. Furthermore, if you don't want to miss any crypto and Bitcoin news in the future, follow me by clicking the «Follow Author» button.