Bitcoin best practices
If you are new to bitcoin, buy from one of these two sources:
- Coinbase / Gemini - Both of these companies are well known, highly regulated companies with good track records and cheap rates. Phone and email support are also available if you have questions.
- Bitcoin ATMs - Bitcoin ATMs are usually located in safe, high-traffic areas like convenience stores, malls or gas stations. Most BTMs have a customer support number you can call if there are problems.
Use these time-tested bitcoin wallets
Backup your bitcoin wallet!
Backing up bitcoin wallets is done usually by writing a series of words on a physical piece of paper known as a "seed". This seed can be typed back into a new device in the event of a device loss/malfunction. Also:
Please be diligent about making backups!
If you lose your device and don't have a backup, you will lose your investment!
Do not store your seeds or backup codes on the internet!
Don't email it to yourself, don't take a picture of it with your mobile phone, and don't put it in your "Dropbox". Online services get hacked all the time. Instead, write down the words on a physical piece of paper.
Store your seed in a physically safe location where it won't get lost
A personal safe, a bank deposit box, or even a locked file cabinet are good places. Just remember where you put it and make sure no one has access to it other than you.
Keep your seed private!
If someone steals the paper backup, they can steal bitcoins! Please keep your seed safe from prying eyes.
Remember to backup your 2-factor authentication codes if you have them.
Many providers will give you "one time login passwords" just in case you either lose your phone or you lost access to your 2-factor app. Store these codes along with your bitcoin backups.
If you upgrade your cell phone, keep your old cell phone around for a while
Reason being cell phones passwords, signatures and 2-factor apps are not automatically backed up for security reasons. If you one day decide to upgrade your phone, please make sure your bitcoin wallet backups are restored and working on your new phone BEFORE you trade in your old phone.
Beware of viruses on personal computers, particularly Microsoft Windows
Viruses tend to collect on personal computers over time (ever notice how your computer gets slower with time?). Microsoft Windows has a particularly acute problem with this, but even Apple get viruses from time to time. Storing your bitcoins on a Microsoft Windows computer is a risky thing to do.
Linux is considered a free, safe alternative as it has basically no viruses. iOS and Android are also typically virus-free as well.
Beware of storing your cryptocurrency on quote-unquote "cloud wallets" (this includes Coinbase!)
Bitcoin "cloud providers" get hacked all the time. (MtGox and Binance are two examples of this). If the cloud wallet company is not properly insured or if the severity of the hack is too high, you risk losing your investment. Transfer your bitcoins to any of the local wallets listed in the "Use time-tested bitcoin wallets" section.
Beware of scammers
I will italicize for emphasis: There are a lot of scammers associated with the bitcoin industry! Reason being is that bitcoin transactions cannot be reversed which makes bitcoin attractive from a scammer's point of view. If someone is selling you a high priced item, such as a car, and he wants you forward bitcoins first, it is most likely a scam.
Beware of scamcoins
Beginning around 2017, there are a plethora of new cryptocurrency 'coins' that were being offered on the market. 95% of them ended up being scams. Naive people bought them in the hopes of replicating the financial success of bitcoin, only to find out their "investment" was worthless nearly a year later. Onecoin and Bitconnect are two examples. If you are new to cryptocurrencies, stick with the "boring" basic coins to minimize your chance of getting ripped of. Basic cryptocurrencies that are relatively safe are: bitcoin, bitcoin cash, litecoin, ethereum, monero, and nano. (Note: this is not financial advise, just an opinion!) The best cryptocurrencies, in my opinion, are the coins with the best network effects.
Check reddit for potential scams or problems in the cryptocurrency community
An excellent way for checking for problems is to check Reddit. Reddit is an online community where people can post content so other members can vote up or down whether they like it or not. The "good" content surfaces to the top fairly readily. Discussions often form around the content, so if a user does something dishonest, they are usually called out pretty quickly.
Use bookmarks for all your cryptocurrency sites
Beware of phishing attempts! Get into the habit of bookmarking first, and then using only the bookmark for getting to your preferred cryptocurrency site.
Use 2-factor authentication for anything cryptocurrency related
2-factor authentication is a login system where you need a password AND a code from your cell phone in order to gain access to your account. While this is a bit of hassle, it is much harder for a hacker to get into your account, because the hacker needs more than just the password to login.
Use "offline" wallets for storing large amounts of cryptocurrency
Offline wallets are wallets that are not plugged into an internet source 99% of the time. This way, they can't be hacked. Trezor is a particular brand that I like. Anyone using cryptocurrencies as a long term investment should get one. The price can range from $30 - $150.