Bitcoin blogger Sylvain Saurel has published a thoughtful piece on essential qualities to being a “True Bitcoiner.” Although insightful, there are other factors that should be considered when choosing to invest in and hold the flagship cryptocurrency.
Understanding of the Technology
The decentralized architecture of blockchain technology is revolutionary, yet it is also complex. It carries with it significant risks for those that do not fully grasp its function. Seemingly simple tasks such as setting up wallets and sending transactions can result in catastrophe if not performed correctly.
Before purchasing Bitcoin, time should be invested in learning the ins and outs of blockchain technology. Its history, functionality, and shortcomings should be thoroughly studied. Research should also be performed on competing platforms. New adopters should put effort into learning about the major exchanges, wallets, and procedures for secure storage. They should also learn the meanings behind common terms such as “proof-of-work” and “block time.”
Virtually all unexpected crypto loss is due to easily avoidable user errors caused by a lack of technical knowledge. These often include lost keys, or using exchanges to store funds. Avoiding loss thus requires understanding and respecting the inner workings of blockchain platforms.
Skepticism And Vigilance
Given the revolutionary nature of distributed ledger technology, a healthy dose of skepticism is a must. Wild claims of easy profits are all but certain to be scams. Also, exchanges and wallets should be thoroughly reviewed by trusted sources before use.
This attitude should also be coupled with a conservative and reasonable investment approach. The most successful crypto investors over the past ten years have been those that have avoided exceedingly risky platforms or services. Rather, they have merely added to their crypto portfolio on a regular basis and kept their keys securely in their own wallets. It is worth noting that taking such a simple approach would have been remarkably profitable for almost every part of the past ten years.
Updated Knowledge About the Latest Happenings in the World of Bitcoin
The blockchain space is rapidly evolving technically, legally, and socially. All holders should routinely follow news and developments without exception. Platforms change, wallets update, and exchanges come and go. Staying updated in this environment is thus critical to keeping funds safe.
Following legal and regulatory developments is especially crucial, as governments are now taking a much closer look at blockchain assets. Some are requiring cryptocurrencies to be reported on tax forms. Others are seeking to squelch blockchain adoption. These issues are extremely relevant to anyone that has an investment in Bitcoin.
A key takeaway from the lessons of proper Bitcoin holding is that a sensible, traditional approach is the best means to keep funds safe. No investment should ever be made without careful study and security rests on being mature and vigilant.
What do you think are the most important qualities for becoming a bitcoin hodler? Share your thoughts in the comments below!
Image via Shutterstock
