Some important things you need to learn
If you're about to start exploring Bitcoin, there are several things you should know. Bitcoin allows you to exchange money in a different way than regular banks. Therefore, you should invest time in educating yourself about Bitcoin before engaging in any serious transactions. Bitcoin should be treated with the same care you would treat your regular wallet, or even more so in some cases!
Protect and secure your wallet
Just like in real life, your wallet must be secured. Bitcoin makes transferring money anywhere incredibly easy and gives you complete control over your money. Such great benefits come with significant security concerns. At the same time, Bitcoin offers a very high level of security when used correctly. Always remember that it is your responsibility to adopt good practices to protect your funds. Read more about protecting and securing your wallet.
Bitcoin price is volatile
The price of Bitcoin can rise or fall unexpectedly over a short period of time due to its nature as an emerging economy, its status as a new noble principle, and, at times, the inelastic nature of markets. Therefore, keeping your savings in Bitcoin is not recommended at this stage. Bitcoin should be viewed as a high-risk asset, and you should never store funds you cannot afford to lose in Bitcoin. If you are receiving funds in Bitcoin, there are several service providers that can convert Bitcoin into your local currency.
Bitcoin payments are irrevocable.
Any transaction issued using Bitcoin is irreversible; it can only be returned by the recipient. This means you should be careful to only conduct transactions with people and organizations you know and trust, or those with a good reputation. Business owners, on the other hand, must maintain complete control over the payment requests they display to their customers. Bitcoin can detect errors and will often not allow you to send funds to a nonexistent address by mistake. In the future, other services may be available that offer consumers greater choice, protection, and security.
Bitcoin is not anonymous!
Maintaining your privacy with Bitcoin requires some effort. All Bitcoin transactions are publicly and permanently stored on the network, meaning anyone can view the balance and transactions of any Bitcoin address. However, the identity of the user behind any Bitcoin address remains unknown until a purchase is made or even revealed under other circumstances. This is another reason why any Bitcoin address should only be used once. Always remember that it is your responsibility to adopt good privacy practices. Read more about maintaining your privacy.
Instant transactions are less secure.
Bitcoin transactions typically process within a few seconds and then begin to be confirmed within the next 10 minutes. During this time, the transaction is considered reliable, but it is reversible. Fraudulent users may attempt to cheat. If you can’t wait for confirmation, asking for a small transaction fee or using an insecure transaction detection system can increase security. For large amounts, such as $1,000, it’s reasonable to wait for six or more confirmations. Each additional confirmation exponentially reduces the risk of a reversal.
Bitcoin is still experimental.
Bitcoin is a new, experimental currency still under development. Although it is becoming less experimental as usage grows, you should keep in mind that Bitcoin is a new invention exploring ideas that have never been attempted before. As such, no one can predict the future of Bitcoin.
Government taxes and laws
Bitcoin is an unofficial currency. However, some jurisdictions still require you to pay income taxes, sales taxes, payroll taxes, property taxes, and capital gains taxes on anything of value, including Bitcoin. It is your personal responsibility to ensure you meet your legal, regulatory, or other tax and other obligations required of you by your government and/or local authorities where you reside.
