Common mistakes we practice as a bitcoiner.

[Hyphen(-)]

Introducing a newbie to bitcoin is one aspect of adoption, but there are other elements that we overlook and that are not intended to be that way. We undervalue these things, they threaten our safety and confidentiality, yet we constantly ignore them, which is not supposed to be that way.
As a newbie, these things are very common, we do them not because we want it to be that way, but because we don't understand how the world works when it comes to use of bitcoin. We view them as ordinary things and become careless about them, but they are the most crucial things we should constantly be reminded.

Below is the list of some common mistakes we do and take them as normal thing in cryptocurrency.

1. Doing KYC:
KYC is a horrible concept, it exposes your identity to everyone. KYC demands you to sacrifice your privacy to the exchange in order to use their exchanges, but you never know what will happen to the information you gave to someone you've never met before. Some exchanges hired third-party companies to complete KYC for them; but, what happens within those companies is kept private; you have no idea when they make deceptive moves with your identity or sell it to other individuals who buy it.

2. Leaving our coins in Centralized exchange:
As a newbie, we may want to make deposits and withdrawals in some centralized exchanges because it appears to be easier, but what really matters is the safety of our crypto assets, since many of these centralized exchanges can be hacked at any time, so storing your crypto assets in centralized exchanges is risky, if the exchange's security is compromised, one may lose all of his savings on the exchange, so it's best to keep our crypto assets in personal wallets.

3. Telling people you hold Bitcoin:
Your assets are to be private, it makes no sense to tell people that you own Bitcoin for security reasons. We have seen and heard of cases where friends kill friend just to get their friend bitcoins and investments,  educate them about bitcoin but do not tell your friends about your bitcoin for your safety and  self protection.

4. Using Custodial wallets:
From the word Custodial, your private keys is in the Custody of another person, which means they are in control of your keys. When Your private keys are in the Custody of another person, it implies they have control of your keys and bitcoin, always remember the phrase "Not your Keys, Not Your Coin," so it is best to use a non-custodial wallet where you will have control over your private key or seed as well as your bitcoin.

5. Not using of Tor or VPN for SPV (Simple Payments Verification) wallets.
Learn to mask your IP address from other nodes, especially those that observe people's addresses and use them for statistical assumptions, whether you're using a full node to send transactions or a lite wallet. The VPN and Tor will assist you in hiding your internet protocol address.

[Charles-Tim]

KYC demands you to sacrifice your privacy to the exchange in order to use their exchanges

There are also custodial wallet that will demand for KYC. There are some noncustododial wallet which are not recommendable because they are luring people to get verified, a good example is blockchain.com wallet sending email to people that did not get verified to get verified and receive $5.

Some exchanges hired third-party companies to complete KYC for them; but, what happens within those companies is kept private; you have no idea when they make deceptive moves with your identity or sell it to other individuals who buy it.

It is not about third parties alone, they can directly sell the data or give the data to third party, the data can be hacked.

2. Leaving our coins in Centralized exchange...

...so it's best to keep our crypto assets in personal wallets.

Exactly, not to leave coin on exchanges, but not only exchanges but also any company providing custododial services. Personal wallet can be custododial wallet, why not just refer it to as noncustododial wallet.

5. Not using of Tor or VPN for SPV (Simple Payments Verification) wallets.

First, I can not dispute that VPN are good to certain extent, but they are centralized and very possible the routing is through only one server unlike Tor that relays traffic through three different servers which are designed to be decentralized.

Second, it is also advisable to run full node with Tor, not only SPV wallet. Using Tor with SPV wallet only will help to achieve anonymity.

Also, if using SPV wallet and you want to use a site to check for especially transaction on blockchain explorer or making use of mempool on a site, using Tor is advisable.

[cryptoaddictchie]

3. Telling people you hold Bitcoin:
Your assets are to be private, it makes no sense to tell people that you own Bitcoin for security reasons. We have seen and heard of cases where friends kill friend just to get their friend bitcoins and investments,  educate them about bitcoin but do not tell your friends about your bitcoin for your safety and  self protection.

This is true. Others suggestion always come up with beginners warning from other sources but this precautionary about your owning should be as private as possible. Its better to be discreet when you saying you have bitcoin and dont be specific with your quantity hold. Actually telling you have is already dangerous cause they could assume you have a lot of it. So better to be quiet or stay low when it comes to your asset.

[KingsDen]

Some exchanges hired third-party companies to complete KYC for them; but, what happens within those companies is kept private; you have no idea when they make deceptive moves with your identity or sell it to other individuals who buy it.

Whether a company hires a third party to complete her KYC or not, it doesn't in anyway tame and/or escalate the the consequences. So, it is bad to do KYC at first, not minding if the company handles it themselves or contracts a third party.

2. Leaving our coins in Centralized exchange:

"Not your Keys, Not Your Coins". It is always not recommended to leave once coins permanently in exchanges, but for day traders who trades numerous coins on exchanges, I don't think they can afford to transfer coins to and fro exchanges every day. So, it can be said that they leave coins on the exchange. So, the most important first step is to choose a reputable exchange.

3. Telling people you hold Bitcoin:

Yes, same thing applies to fiat. I do not see anyone boosting in the street about how much they have in their local bank accounts. So it should be applicable to bitcoin and other valuable assets 

5. Not using of Tor or VPN for SPV (Simple Payments Verification) wallets.
The VPN and Tor will assist you in hiding your internet protocol address.

The Tor can be secured but for the VPN you will still make some good efforts to ensure you use some reputable VPNs.

[Apocollapse]

You're correct with number 2,3, and 4, but you're not completely correct on 1 and 5.

I wouldn't say it's a mistake, but it depend on the user itself if they're care with their privacy or not. Some people are correctly hold their coins on non custodial wallet and using an exchanges only to buy or sell their coins, but they don't care with their privacy or hide his IPs.

VPN isn't good to hide your IPs, because they mostly know your IPs and store your data. It's useless if you use lite/lightweight wallet without running with full node and want to hide your location with Tor, because you're using unknown server.

[Charles-Tim]

I wouldn't say it's a mistake, but it depend on the user itself if they're care with their privacy or not. Some people are correctly hold their coins on non custodial wallet and using an exchanges only to buy or sell their coins, but they don't care with their privacy or hide his IPs.

VPN isn't good to hide your IPs, because they mostly know your IPs and store your data. It's useless if you use lite/lightweight wallet without running with full node and want to hide your location with Tor, because you're using unknown server.

Yoi can get a clear information about how bitcoin and many other crypto transactions are available to the public



https://bitcointalk.org/index.php?topic=5229148.0


Also, bitcoin transactions can not be reversed and it can be done in a way attacker would be difficult or remain impossible to be traced. These makes such transactions to be best remain private or anonymous.

Once an attacker knows about someone having bitcoin, that is deadly. A thief that visit someone at home will refuse to accept bank transactions but will prefer cash or to rob his victim with bitcoin or privacy coins like monero. The best way to deal with crypto generally is with you having privacy.

[Hyphen(-)]

You're correct with number 2,3, and 4, but you're not completely correct on 1 and 5.

I wouldn't say it's a mistake, but it depend on the user itself if they're care with their privacy or not. Some people are correctly hold their coins on non custodial wallet and using an exchanges only to buy or sell their coins, but they don't care with their privacy or hide his IPs.

Your privacy is as valuable as gold, and disclosing it to an unknown person can result in a regret that you will never forget. What if the exchange where you completed your KYC sells your personal information and it is misused? This could lead to a situation you didn't expect. Trust no one with your privacy. 

[Daniel91]

I would add something else, based on personal experience.
Many people enter the crypto arena completely unprepared, with unrealistic expectations of quick and easy earnings.
When the crypto market grows, then the interest of the media and the public in crypto grows and it seems to everyone that crypto is a great opportunity to make money.
What people don't realize is that this is a high-risk investment that should not be entered into with borrowed money or money we need for something else.
It is also necessary to be well informed and analyze the market in detail, and to understand the technology and how to protect yourself.
In the end, everyone needs to have an investment strategy and a clear exit strategy.
Beginners who do not follow these basic rules usually end up badly and lose their money in the crypto.

[hugeblack]

The mistakes you mentioned differ between being related to privacy and security, and both are a different standard and difficult for a beginner.

For example, privacy is not an easy thing in the current reality, and it is almost impossible for a newbie to be able to hide any trace on the Internet, especially from governments that allocate resources for that, and thus enhancing privacy is the matter, but it may not mean much if your goal of Bitcoin is investment or freedom from traditional methods .

Security, which is the most important thing, because with any other party accessing your key, you lose access to your coins and thus lose your money, which is the important aspect for newbies.

[Welsh]

1. Doing KYC:
KYC is a horrible concept, it exposes your identity to everyone. KYC demands you to sacrifice your privacy to the exchange in order to use their exchanges, but you never know what will happen to the information you gave to someone you've never met before. Some exchanges hired third-party companies to complete KYC for them; but, what happens within those companies is kept private; you have no idea when they make deceptive moves with your identity or sell it to other individuals who buy it.

While I definitely believe Know Your Customer has become increasingly hostile, and quite frankly a breach of privacy, I can understand the concept of it when it was first introduced. However, despite it maybe being a good idea for specific cases, it has quickly turned into a marketing ploy that companies are basically abusing. Although, having said that I'm not even sure we can blame the companies themselves, usually this information is required by the government of the country they operate in. Some being much more invasive than others. However, I have no doubt that this information being collected is not only being used for verification, but being used to better their marketing.

[AakZaki]

This is true. Others suggestion always come up with beginners warning from other sources but this precautionary about your owning should be as private as possible. Its better to be discreet when you saying you have bitcoin and dont be specific with your quantity hold. Actually telling you have is already dangerous cause they could assume you have a lot of it. So better to be quiet or stay low when it comes to your asset.

if the person in question is a stranger or just a friend, it may be very dangerous because that person will know how many assets they have. It is feared that there will be unwanted actions.
But it's different when telling someone you really trust, like your family or partner. because it is important that someone you trust knows your assets and knows the private key. this will be related to the sustainability of the asset when something happens to us.

[Welsh]

someone you really trust, like your family or partner. because it is important that someone you trust knows your assets and knows the private key. this will be related to the sustainability of the asset when something happens to us.

No one needs to know your private key. You could setup a solution to you passing away today, to assure that they get your Bitcoin. This is actually being discussed at the moment over in the Bitcoin Discussion section, see this post for details. However, I'd recommended taking a look at the whole thread.

I'm of the belief that no matter what the circumstances are your private key should be only known to you, and you only. As it suggests in that post, they can unlock it via their key after the defined amount of time, however you can prevent it any time you want with your private key.

[Asiska02]

1. Doing KYC:
KYC is a horrible concept, it exposes your identity to everyone. KYC demands you to sacrifice your privacy to the exchange in order to use their exchanges, but you never know what will happen to the information you gave to someone you've never met before. Some exchanges hired third-party companies to complete KYC for them; but, what happens within those companies is kept private; you have no idea when they make deceptive moves with your identity or sell it to other individuals who buy it.

I believe in this 100%. People don’t take KYC serious anymore, they give their details out so easily because of the little money they’re been offered by those exchanges when they want to be fully verified or access to some services that are important for one. They lure you to do KYC by giving you limited access to their services or by promising you some little dollars. The repercussions are always worse as we don’t know when our pieces of information can be sent to or used illegally without our consent.

It was also posted on this forum where Binance was accused of sharing their users' data to Russia which can lead to even sanctions on such persons because of a transaction they did long ago. The thread was posted earlier by hatshepsut93
https://bitcointalk.org/index.php?topic=5395887.msg59955160#msg59955160

[isaac_clarke22]

~

KYC is really an annoying policy that many regulated platforms conduct. I recall back in the days when I was not able to do anything with my Bitcoin in a web wallet due to my account being in a Level 1 verification BS.
It's not just that your privacy is f'ed, but also the fact that they have full control of whatever you gave them including your Bitcoins.
I usually just use custodial wallets for the services they offer, but not mainly for holding Bitcoin.

[BITCOIN4X]

In any case I don't think that KYC is anything to go wrong especially if you have to convert your bitcoin to fiat. Almost all centralized exchanges require you to pass KYC and you have no choice if it has become a rule that all customers have to follow.

Maybe KYC is not completely secure because there is always the possibility of the data being leaked, but try to use a platform that is very trusted and has a good reputation so that the security of our personal data in the form of KYC is not used by other parties. Avoid KYC for a few bucks in the bounty, it's recommended. Right now we can't go against the government with KYC policies, but of course we have an alternative to always take good care of privacy and that can only be done by staying away from centralized exchanges.

[PrivacyG]

Actually telling you have is already dangerous cause they could assume you have a lot of it. So better to be quiet or stay low when it comes to your asset.

This is very true and I have experienced it myself.  When people hear the name 'Bitcoin', they immediately think about something very expensive, very hard to afford as an average person.  Too few know more details such as how you can own just a small part of it so you do not need to pull out a multiplier of $30,000 to invest in Bitcoin.  So when you mention you own Bitcoin, they immediately think you have a large holding.

Maybe saying you have a small portion of Cryptocurrencies is smarter.  Bringing Bitcoin directly into discussion is almost equal to saying you own a luxury Penthouse.  Everyone will think about a multi million dollar Penthouse, nobody would ever think about a cheap, luxury looking apartment in the middle of nowhere.

-
Regards,
PrivacyG

[MidNite36]

Buying Mining Equipment first before doing research

Some newbies learn about crypto mining without understanding that it's a seasonal thing, they don't make use of a mining calculator to understand how long it's going to take for them to get their ROI back, and they are always the first to start selling their Asic miners and graphic cards at loss price when a bear market hits hard.

[Theones]

Buying Mining Equipment first before doing research

Some newbies learn about crypto mining without understanding that it's a seasonal thing, they don't make use of a mining calculator to understand how long it's going to take for them to get their ROI back, and they are always the first to start selling their Asic miners and graphic cards at loss price when a bear market hits hard.

THat is so true - we get the stuff before and we do the research later - which is inviting trouble.
Its better not to hurry, take time and invest when you are 100 percent sure they are worthing investing.
Good luck for the future.