You may have heard a lot of stories of people who bought bitcoins a few years ago and got astonishing profits with the price rise, you may think that those were easy profits for lucky people, but when you look at it you will see that in most cases it wasn’t easy at all. In this post we will see what are the main mistakes that prevented people from becoming Bitcoin millionaires and how to avoid them.
Buying cheap was the easy part
People who got involved in Bitcoin in the early days had the occasion to acquire large quantities of coins for a low price, how they got there was often a mix of luck and intuition. To hear about Bitcoin in the early days you had to have some kind of luck, either having the right friends that would introduce you to it, follow the right online communities or read about it the first times it went on the news. To buy bitcoins you needed a bit of intuition of what it could have become, most people actually got in for the wrong reasons (e.g. free transactions) but still they saw some potential in that little decentralized money experiment.
However, getting the coins was the easy part, not losing them was much harder.
Common mistakes to lose your coins
Many people used to have have huge amount of bitcoins in the past, but then they lost most of them in multiple ways. Let’s see what are the most common mistakes that you have to avoid to hope to become a Bitcoin millionaire one day:
- Keeping money on the exchanges: Bitcoin wallets sometime can be a pain, you have to take care of your private key, have a strong password, back-ups etc, moreover if you are a trader you just want to have liquidity on a trading platform. For this reason many just prefer to leave their coin on the exchange where they bought it. Mistaking exchanges for banks cost a lot of money to several early investors, the infamous MtGox exchange caused thousand of bitcoiners to lose a relevant part of their holdings, even many Bitcoin Devs and known personalties in the industry got scammed by MtGox. So remember, you own your coins only if you control the private keys, otherwise you are just trusting someone else.
- Putting money in alt-coins: once you start to see some profits with Bitcoin, you may start to believe that you are some kind of finance genius and you should reinvest your fresh profit in something else. At this point you will probably try to invest in some other cryptocurrencies or even an ICOs, hoping for further profits. The truth is, Bitcoin is here to stay, it has network effect and validated use cases (store of value, data notarization and censorship-resistant transactions), alts are mostly just experiments, they come and go.
Source/More: Getting rich with Bitcoin – Federico Tenga – Medium