The Bitcoin cryptocurrency has been leading the market for 15 successful years now, being close to worldwide adoption and achieving legal tender status locally. The decentralized, immutable, and transparent currency set the tone for all the other altcoins since its white paper was an important source material after which the crypto market developed.
Unfortunately, even after so many years, people don’t fully understand how Bitcoin works. While it’s a pretty complex concept and only exists digitally, factors like cognitive bias and fear hinder people’s potential to become substantial investors.
If we were to make a bitcoin price prediction, the future would seem quite bright, as its value is expected to increase by more than 5% in the following five years. Therefore, there’s no reason for someone not to prioritize Bitcoin investment if they want to save for the future.
However, the lack of skills and dedication makes investors forgetful or careless, leading to them losing their Bitcoins. Here’s how it can happen.
Not backing up the private key in multiple locations
Since Bitcoin is decentralized and doesn’t base its operations on banks, you must mind security alone. That’s why you’re provided with two keys when you create a digital wallet and buy crypto for the first time. The public key lets you send or receive Bitcoin, while the private key is similar to a password, allowing access to your wallet. You should never share the private key with anyone and store it safely.
The biggest mistake you can make is to store the private key online. Despite software’s high-tech security measures, online keys can be compromised through phishing or malware. Regardless of the storage method chosen, it would also be ideal to have it somewhere offline, whether on a hardware or paper wallet. These methods are part of the cold wallet storage concept, which means you don’t need the internet to access your funds.
Participating in fake giveaways
Money scams are as old as time. Unfortunately, they keep working even in the digital era, where high-end technological devices and software make it easy to avoid them. Fake giveaways with Bitcoins are frequent, as famous gurus or even celebrities make up giveaway contests for which people fall.
The problem is that when you first try to learn about Bitcoin, you follow certain influencers who seem to have experience in investing, but you don’t truly know the person behind the screen. Scammers can impersonate anyone and copy their accounts from scratch, which makes them credible when posting a giveaway of doubling the winners’ BTC. However, the catch is that they ask you to send their Bitcoins to a specific address, which will only drain your portfolio. That’s why you should never trust giveaways.
Mining with the wrong hardware
Mining Bitcoin is essential to maintain the network’s high security and trust. Miners do it to gain considerable rewards for their hard work and numerous hours of keeping their rigs on, so they receive Bitcoins after successfully adding blocks to the blockchain.
It is possible to lose your Bitcoins right after mining it if you forget or lose your private key, but poor hardware components can also lead to significant losses. For example, store your Bitcoins on an HDD external hard drive, which is becoming obsolete for such energy-intensive operations. It might be possible for it to fail and make your Bitcoins disappear in an instant.
When it comes to mining Bitcoin, you should use some of the latest software and hardware elements because the mining process gets more complex each year, requiring new strategies.
Not using the safest investment method
Investing in Bitcoin seems easy and secure since the cryptocurrency has withstood so many market changes. However, despite being a safe investment in the long term, Bitcoin is still quite volatile, so the worst thing you can do for your portfolio is try to make fast money with it.
Trading is quite complex and should be done only by the most professional individuals. While it can provide considerable returns, it’s most likely to make your Bitcoin disappear when prices fluctuate. For instance, if you want to switch exchanges after seeing more profitable rates, it’s best to take your time and watch how values change before deciding because it’s possible that by the time the Bitcoin transaction is done, which is about ten minutes, the exchange’s prices to change dramatically.
Not being wary of the latest scams
Finally, one of the easiest ways to lose your Bitcoins includes being ignorant of the various methods through which scammers and hackers access your funds. Despite secure blockchains, hackers continuously create more sophisticated ways of stealing crypto, taking advantage of people’s lack of crypto literacy.
Fake giveaways are the simplest forms of scams, but there’s more to that:
- Social engineering strategies consist of individuals gaining the trust of another person to make them reveal their private keys. The scam can last for as long as possible;
- Phishing involves an email in which the scammers place a link where the victim will introduce their private key, as it seems like the source is a reliable one;
- Blackmail scammers threaten victims to expose something personal about them, whether they have compromising material or not, in order to access their cryptocurrencies;
One of the latest and most efficient ways for scammers to steal people’s money is through crypto-based opportunities like ICOs and NFTs. In most cases, these projects present a way to make money, but behind them, an entire team of fraudsters will pull off after receiving your Bitcoins. That’s why it’s best to check their backgrounds before investing.
Will you continue investing in Bitcoin now?
Bitcoin investments are considerably profitable in the long term, but the opportunities also come with significant risks of misplacing your money. There are so many ways in which you may lose access to your portfolio, including forgetting your private key and participating in fake giveaways. However, hardware failure is also a possible cause of losing Bitcoin as a miner.
