{"id":3237,"date":"2022-02-03T13:13:16","date_gmt":"2022-02-03T13:13:16","guid":{"rendered":"https:\/\/xcoins.com\/?p=3237"},"modified":"2023-09-12T20:58:15","modified_gmt":"2023-09-12T20:58:15","slug":"5-more-mistakes-to-avoid-in-crypto","status":"publish","type":"post","link":"https:\/\/xcoins.com\/en\/blog\/5-more-mistakes-to-avoid-in-crypto\/","title":{"rendered":"5 (More) Mistakes to Avoid in Crypto"},"content":{"rendered":"

As with any investment, there are things you should watch out for when purchasing cryptocurrency. In a <\/span><\/i>previous article<\/span><\/i><\/a>, we shortlisted 5 of the biggest mistakes that you should avoid in crypto. Here, we’ll tell you about another 5 common errors and how you can prevent them.<\/span><\/i><\/p>\n

If you\u2019re thinking of purchasing crypto, it\u2019s worth noting the mistakes that investors commonly make on their journey. By being aware of how they may happen, you’re less likely to make the mistakes yourself and you can better protect your crypto assets.<\/span><\/p>\n

1. Not storing your crypto responsibly<\/span><\/h2>\n

How you choose to store your crypto is one of the most important decisions you\u2019ll make. Unlike the traditional financial system, where your money is stored in a bank account or with an investment broker, how you choose to custody your cryptocurrency is your responsibility. Failing to store your tokens safely can lead to you losing your holdings, and in most cases, you won\u2019t get them back.<\/span><\/p>\n

There are several reasons why poor storage may cause you to lose your crypto, including theft, computer faults, an exchange being hacked or your tokens being withheld by an exchange.<\/span><\/p>\n

If you’ve decided to hold your cryptocurrency long-term, it’s vital that you store it securely, away from the grasp of hackers. <\/span>The two main types of storage<\/span><\/a> are hot wallets (such as desktop wallets and online wallets, which includes exchanges) and cold wallets. Cold wallets are typically favoured as a more robust storage solution.<\/span><\/p>\n

However, stashing your crypto securely isn\u2019t just for those with long-term gains in mind. Even if you do plan to sell or trade your tokens in the short-term, you should still ensure that your crypto is stored safely. Our guide on <\/span>hack-proof ways to secure your crypto assets<\/span><\/a> can help you to choose the right custody solution for you.<\/span><\/p>\n

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2. Forgetting to backup your wallets<\/span><\/h2>\n

To ensure that your coins remain secure and you\u2019re able to access them in the event that you don\u2019t have access to your login details, keeping backups of any wallets you use is of equal importance.<\/span><\/p>\n

Backups can help to protect you against losing your crypto due to problems with your devices or if you simply lose or forget your password. It\u2019s estimated that 20% of Bitcoin\u2019s current minted supply (3.7 million Bitcoin) is permanently lost, partly due to lost passwords. If your wallet is encrypted, having a backup will also allow you to regain access to your crypto if your computer or smartphone is stolen.<\/span><\/p>\n

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There are a few ways that you should backup your wallets:<\/span><\/p>\n

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  1. Back up your entire wallet. <\/b>Some wallets use private data internally that you can\u2019t see. This step is typically required with wallet applications so it’s worth checking whether the wallet you\u2019re using has an automatic backup feature built into it or if you need to do this manually.<\/span><\/li>\n
  2. Back up your seed phrases. <\/b>Your seed phrase is the list of words that is generated by the wallet and given to you so you can access your stored crypto. Your phrase is the key to your crypto assets if you lose access to your account. You should always have a backup of this, either in encrypted software, as a physical copy or both; having multiple secure methods and locations for your backups can bolster your security.<\/span><\/li>\n
  3. Back up your passwords and 2FA seeds.<\/b> Your passwords and 2-factor authentication (2FA) codes are your first line of access to your wallet. It\u2019s crucial to have a backup of both your wallet\u2019s password and the seed used to generate your 2FA codes, just in case.<\/span><\/li>\n<\/ol>\n

    3. Double-check your recipient\u2019s address<\/span><\/h2>\n

    One of the luxuries of cryptocurrency is the freedom to make peer-to-peer transactions without the need for an intermediary. However, as the saying goes, \u201cwith freedom comes responsibility\u201d, and in this case, you\u2019re personally responsible if you make a mistake when sending your crypto.<\/span><\/p>\n

    Before you send any of your crypto, double-check that the recipient has given you a wallet address for the same type of token. It’s best practice to send a small amount of crypto first as a test transfer to ensure that it\u2019s heading to the right place. This step is vital if you’re sending a large payment.<\/span><\/p>\n

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    4. Using the wrong exchange<\/span><\/h3>\n

    The exchange you choose is an integral part of your success. For example, choosing an insecure or poorly designed exchange can put your crypto at risk of theft. Here are some factors you should consider:<\/span><\/p>\n