Why Many Beginners Misunderstand How Bitcoin Wallets Works

[Sammysmart001]

That's a pretty weird question, OP. Let me ask you a counterquestion. : Were you born smart already? Or you were given some knowledge, and step by step you learned not only to walk but also to think.

Doesn't a beginner stand for someone who doesn't know something? Yes, being a beginner, I didn't understand anything at all, and everything and much can be read in the user history. We, those who came here not understanding much, studied, read, and asked. When I came to the forum, I was afraid to try anything with bitcoin for a very long time until a very kind and very good person literally explained everything to me on his fingers, for which I am immensely grateful to him. Therefore, I would like people to take their time, as haste can make a lot of mistakes, such that you can lose your finances afterwards, and you will only have to complain about your stupidity and laziness.

Nice perspective, i do understand your point but my intentions are not that we should expect that the beginners should kn how Bitcoin works from the very start. But rather I want each and everyone to reflect on their very beginning of learning journey let all hear from your very beginning, how started before now that you alrady know how Bitcoin works. Generally learning takes time and a bit by bit to get to understand how things works, having to rush out things brings mistakes

[Crytohillss]

That's a pretty weird question, OP. Let me ask you a counterquestion. : Were you born smart already? Or you were given some knowledge, and step by step you learned not only to walk but also to think.

Doesn't a beginner stand for someone who doesn't know something? Yes, being a beginner, I didn't understand anything at all, and everything and much can be read in the user history. We, those who came here not understanding much, studied, read, and asked. When I came to the forum, I was afraid to try anything with bitcoin for a very long time until a very kind and very good person literally explained everything to me on his fingers, for which I am immensely grateful to him. Therefore, I would like people to take their time, as haste can make a lot of mistakes, such that you can lose your finances afterwards, and you will only have to complain about your stupidity and laziness.

Nice perspective, i do understand your point but my intentions are not that we should expect that the beginners should kn how Bitcoin works from the very start. But rather I want each and everyone to reflect on their very beginning of learning journey let all hear from your very beginning, how started before now that you alrady know how Bitcoin works. Generally learning takes time and a bit by bit to get to understand how things works, having to rush out things brings mistakes

What am not really trying to encourage is for everyone to reflect on the beginning of their own learning journey. Share what it was like when one first begin before one gained the knowledge one have today learning is a process no one knows everything at a start knowing comes step by step. Trying to rush the process often leads to confusion and mistake. That's why it's valuable to hear different experience they can encourage and teach those who are just getting started.

[Miles2006]

Traders are the ones likely to store their coin in an exchange, considering that exchange is seen as a third party wallet I doubt if 90% of newbies fall into the category of wanting an exchange to store their coin. A simple research can actually help, well I was privileged to an extend these informations was learnt first even before holding my first coin.
Holding bitcoin is all about being possessive, the wallet store the coin yet this depends entirely on an investor basically it’s our duty to protect every private and important information regarding our wallet otherwise anyone can gain full access like hacking into our account.

[tbct_mt2]

Traders are the ones likely to store their coin in an exchange, considering that exchange is seen as a third party wallet I doubt if 90% of newbies fall into the category of wanting an exchange to store their coin. A simple research can actually help, well I was privileged to an extend these informations was learnt first even before holding my first coin.
Holding bitcoin is all about being possessive, the wallet store the coin yet this depends entirely on an investor basically it’s our duty to protect every private and important information regarding our wallet otherwise anyone can gain full access like hacking into our account.

Centralized exchanges are likely the most favorite places for people to make their Bitcoin purchases. Hence, if they are not aware of risk of centralized exchanges, they will leave their bitcoin there, just for holding. They are not necessarily traders to leave their bitcoins on centralized exchanges.

Clearly it is not a good practice, and there are many reminders about risk, recommend people to do different practice: withdrawing bitcoin from centralized exchanges to their non custodial wallets.

Reminder: do not keep your money in online accounts
Be careful using Binance & Centralized Exchange
OKX frozen my account and required me to KYC with a less than $1,000 deposit
Recent events should make everyone withdraw all their coins to their own wallets: Part 1
Recent events should make you withdraw all your coins to your own wallet: Part 2
Recent events should make you withdraw all your coins to your own wallet: Part 3
Get your coins out of custodial wallets now: Part 4

[Asuspawer09]

I guess it is probably because most of us here started creating the Bitcoin wallets or our crypto wallets when we are just a beginner or doesn't have a lot of knowledge about it yet, we didn't really do a lot of research about it most of the time we just started creating it because we wanted to try and experience it, it's not like we do our research first so when we do we mostly make the mistakes because we don't understand it yet, even me when I created the my wallets I don't really know what to do with my seed phrase or my private key so what usually happened is im just gonna save it anyway on my phone or pc or something then forget about it not realizing what i've done and I will just end up losing it because I probably lost the key or deleted it.

But now that I already have a lot of experience and I undestand it a lot better now I now know what to do, create a wallet then save and backup my private key on offline, usually just put it on a notebook then have a offline flashdrive where I store my wallet seed phrase, wasn't the best thing to do but it is better than just doing nothing and forgetting your seed phrase.

[Patikno]

When you start using bitcoin, did you think that wallet stores your BTC or you do understand how it works from
The very beginning?

Since I first started using Bitcoin, I have understood the basics of Bitcoin wallets, and I am very careful with my private keys (including seedphrases). Furthermore, I was already aware of the 2014 incident at a crypto exchange often referred to as "Mt. Gox" (actually, that is an abbreviation for "Magic: The Gathering Online eXchange"). So, I learned a lot from the experiences of previous people, and I really understand the words "not your keys not your coins".

Source : wikipedia.org - Mt. Gox

Therefore, I recommend beginners to learn more about crypto or Bitcoin before starting, and that is the ideal approach rather than jumping straight in. This is to prevent unwanted consequences that might happen to you, especially if you ignore it. The main thing is; Spending a lot of time studying is better than spending a lot of money (due to loss).

[khaled0111]

What am not really trying to encourage is for everyone to reflect on the beginning of their own learning journey. Share what it was like when one first begin before one gained the knowledge one have today learning is a process no one knows everything at a start knowing comes step by step.

Yes, no one is born knowing everything and learning is a continuous process. We all started as beginners, but the point here is that you shouldn't start using (buying or selling) bitcoin or any other cryptocurrency unless you understand the basics, at the very least and this applies to anything else with value.
I understand that people learn at different paces, but the good thing is that when it comes to cryptocurrencies and especially bitcoin then understanding the basics isn't that hard and doesn't take much time.

[notocactus]

Furthermore, I was already aware of the 2014 incident at a crypto exchange often referred to as "Mt. Gox" (actually, that is an abbreviation for "Magic: The Gathering Online eXchange"). So, I learned a lot from the experiences of previous people, and I really understand the words "not your keys not your coins".

Source : wikipedia.org - Mt. Gox

Mt. Gox is an interesting case that has both massive contribution to Bitcoin community to effects when it was hacked and collapsed as well as lessons left for people to learn from. Like many years after Mt. Gox collapse, there are victims have yet received compensations from Mt.Gox. If anyone need a reminder and case study about risk of centralized exchanges, Mt.Gox is here for them.

• Bitcointalk history of MtGox and how a Bitcointalk post caught the MtGox hacker.

[TokenTikas]

Therefore, I recommend beginners to learn more about crypto or Bitcoin before starting, and that is the ideal approach rather than jumping straight in. This is to prevent unwanted consequences that might happen to you, especially if you ignore it. The main thing is; Spending a lot of time studying is better than spending a lot of money (due to loss).

This could not be a better example for newbies than this. If new people understand this simple matter, they will never jump in directly again. If they learn properly a little in the beginning then there will not be any problem from the next time, but they are not interested even in this small learning part. That's why we have to hear unnecessary frustration from newcomers.

[Hyphen(-)]

We getting to understand how our wallet works gives us good understanding about Bitcoin. Wallet is only a tool, true ownership comes from you controlling your own private key. You don’t have full control over your BTC if you can’t be in control of your keys . Do well to protect ur seed. Once you as a beginner is able to understand how this works, then you will focus  more on self custody.

My question for us all
When you start using bitcoin, did you think that wallet stores your BTC or you do understand how it works from
The very beginning?

Having good knowledge about the whole cryptocurrency, Bitcoin and how it works, blockchain and how transactions are been broadcasted is good for every beginner, if they have good knowledge about Bitcoin and how it works, they will do everything possible to protect their Bitcoin by all means because they will understand how it works and will know that their seed phrase or private key is very important and it is what they need to keep safe to have their Bitcoin safe in their wallet.

The choice of using Centralized exchanges to hold your Bitcoin do come when the newbies have no proper knowledge about Bitcoin and maybe they are introduced to crypto using CEX, some of them don’t bother to learn more, they will only rely on the CEX to keep holding their coin which is not safe because not your keys, not your Bitcoin.

[Sammysmart001]

Having good knowledge about the whole cryptocurrency, Bitcoin and how it works, blockchain and how transactions are been broadcasted is good for every beginner, if they have good knowledge about Bitcoin and how it works, they will do everything possible to protect their Bitcoin by all means because they will understand how it works and will know that their seed phrase or private key is very important and it is what they need to keep safe to have their Bitcoin safe in their wallet.

The choice of using Centralized exchanges to hold your Bitcoin do come when the newbies have no proper knowledge about Bitcoin and maybe they are introduced to crypto using CEX, some of them don’t bother to learn more, they will only rely on the CEX to keep holding their coin which is not safe because not your keys, not your Bitcoin.

I agree with you on this. I have also observed that the very place someone is introduced to Bitcoin determines how deep Dey understand it. if a newbie is being introduced first on exchange it will be very easy for him/her to understand that exchange is the wallet and that their coins are being store there.

 This very misunderstanding will stay for the main-time still Dey learn about self custody, private key and also about how blockchain works. I think this the reason why it very important you understand the basics before venturing into buying Bitcoin from the first place, so they should know what Dey about to buy.

[cozytrade]

That's a pretty weird question, OP. Let me ask you a counterquestion. : Were you born smart already? Or you were given some knowledge, and step by step you learned not only to walk but also to think.

Doesn't a beginner stand for someone who doesn't know something? Yes, being a beginner, I didn't understand anything at all, and everything and much can be read in the user history. We, those who came here not understanding much, studied, read, and asked. When I came to the forum, I was afraid to try anything with bitcoin for a very long time until a very kind and very good person literally explained everything to me on his fingers, for which I am immensely grateful to him. Therefore, I would like people to take their time, as haste can make a lot of mistakes, such that you can lose your finances afterwards, and you will only have to complain about your stupidity and laziness.

Nice perspective, i do understand your point but my intentions are not that we should expect that the beginners should kn how Bitcoin works from the very start. But rather I want each and everyone to reflect on their very beginning of learning journey let all hear from your very beginning, how started before now that you alrady know how Bitcoin works. Generally learning takes time and a bit by bit to get to understand how things works, having to rush out things brings mistakes

I agree most buyers of bitcoins do not understand bitcoins wallets due to the fact that they are naturally comparing them with their bank accounts. I used to believe that the wallet contains the coins when I first heard about Bitcoin. Later I realized that the wallet primarily provides access to the funds that are marked on the blockchain with the help of private keys. This is normal and that's why Bitcoin training is a process that takes a while. It's important for new users not to rush the process. Slowly developing knowledge through reading, asking questions and using smaller amounts of their money will not make them make mistakes that will cause them to lose their money.

[standardnepo]

When you start using bitcoin, did you think that wallet stores your BTC or you do understand how it works from
The very beginning?

I didn’t know anything about wallets at the beginning. I was just learning, so I kept my Bitcoin on an exchange. It was only a small amount, so I didn’t really mind.

Then I started learning about cold wallets and got one (a Trezor Safe 3). I moved all my sats to my cold wallet. Like I said, it’s still a small amount, but I wanted to store them there anyway. All of this happened over the last four months. I basically started learning about Bitcoin four months ago, and about two months later I got a cold wallet.

[Taskford]

Furthermore, I was already aware of the 2014 incident at a crypto exchange often referred to as "Mt. Gox" (actually, that is an abbreviation for "Magic: The Gathering Online eXchange"). So, I learned a lot from the experiences of previous people, and I really understand the words "not your keys not your coins".

Source : wikipedia.org - Mt. Gox

Mt. Gox is an interesting case that has both massive contribution to Bitcoin community to effects when it was hacked and collapsed as well as lessons left for people to learn from. Like many years after Mt. Gox collapse, there are victims have yet received compensations from Mt.Gox. If anyone need a reminder and case study about risk of centralized exchanges, Mt.Gox is here for them.

• Bitcointalk history of MtGox and how a Bitcointalk post caught the MtGox hacker.

The situation  happen on Mt.gox is perfect example that the risk of those centralized exchange is true and hacking also scamming activities will happen with those platform.

Yeah the existence of this platforms really helps Bitcoin growth on its early days, but the collapsed happen on that platform creates massive bad effects and many people feel those effect even these days, many of their victims still waiting to get their compensations and that shows the longevity of the case will exist then people are unsure if they can still get something or not. This community also plays good role for exposing those scammers and if anyone want to study these kind of cases, then Mt.Gox case is best example to learn from.