10 Awesome Bitcoin Tips For Beginners (And What To Do Next)

Ready to start learning what this whole “Bitcoin” thing everyone keeps talking about is? If so, join us as we go through 10 of the best Bitcoin tips for beginners in order to help new comers get started quickly and safely.

Combining tried and true investment advice learnt over decades with years of deep, expert Bitcoin knowledge we want to get you off to the best start possible. We know Bitcoin can be confusing which is why we have supporting articles for each step in case you need extra guidance. This one piece alone could save you thousands of dollars and lots of headache, so it’s not something you’ll want to miss!

Understand What You’re Investing In

Thou shalt not invest in anything thou doesn’t fully understand

The absolutely first tip we can give is to properly educate yourself. All the tools and money in the world won’t do you any good if you don’t understand what you’re investing in and Bitcoin can be quite different to what most assume. Helping people understand Bitcoin in simple terms is what we specialise in here at Athena Alpha, so we have plenty of excellent resources available for free. Two main ones are our Beginners and Bitcoin 101 categories or you can start with our Understanding Bitcoin piece.

Don’t be afraid to ask for help as we’re always happy to answer questions (no matter how basic!) and you’ll be pleasantly surprised with how helpful the general Bitcoin community is too. It’s also important to make sure you find reputable news and information sources. This can be tricky as many major news platforms really don’t understand Bitcoin well and thus, give out out of date or just plain wrong information.

That’s why we created Athena Alpha in the first place, to help create and spread top tier level Bitcoin tutorials for beginners. So simply subscribe and you’ll not only be kept up to date, but get educated on how amazing Bitcoin is with simple and straight forward articles each week. For the latest news, we also recommend either Bitcoin Magazine or The BTC Times as they both specialise in and properly understand Bitcoin.

Choose A Secure Private Wallet

Not your keys, not your coins.

Choosing a self-custody (or private Bitcoin Wallet) and holding your own Private Keys is the next most important thing to do when it comes to Bitcoin. A wallet is what generates, stores and manages your private keys just like a Password Manager does for your passwords.

Private keys are what’s used to spend your bitcoins, so whoever holds your private keys knows and controls everything. If you let someone else hold or “custody” your private keys then they can see your balances, your transactions, the senders and receivers, everything. You have zero privacy. It also allows them to sensor, kick ban you or even spend your funds.

Many who have trusted third parties with their keys such as centralised crypto exchanges have lost all their bitcoin. People have even lost their fiat money (USD, Euro etc) by using Fiat Wallets too. Examples include: MtGox, Cryptsy or FTX. If you have funds on a centralised exchange. Get. Them. Off. Now. You’ve been warned!

To take custody of your own private keys means you’ll need to download and install your own wallet software. You might think it’s too technical or hard to do, but it’s not. It’s just a software program like the 174 other apps you have on your phone right now. Examples of good Bitcoin wallets include:

• Desktop: Sparrow Wallet
• Android: Nunchuk and BlueWallet
• iOS: BlueWallet

Keep Your Private Keys Safe

Once you have your wallet setup it will generate your private keys for you, these are essential to accessing and spending your Bitcoin, so it’s crucial to keep them safe. The best way to do this is by buying and using a Hardware Wallet. Other important points include:

• Never, ever sharing your private key with anyone
• Never store your private key digitally. Store it offline on laminated paper or a steel plate
• Keep a backup in an offsite, secure location if you have serious investments
• Learn to use both hot and cold wallets
• Keep your computers, apps and hardware wallets software/firmware up to date
• Never send, receive or post info on social media about your wallet setup. Ever!
• Never use a pre-generated seed phrase, these are scams

We have an entire guide on How To Protect Your Bitcoin Private Key if you want more detailed information.

Choose A Non-KYC Exchange

KYC (Know Your Customer) and AML (Anti Money Laundering) are regulations that all crypto exchanges like Coinbase or Binance have to comply with. It’s why they require you to “verify your identity” before they let you do anything. They want to know your name, address, drivers license, photo and more.

All the big Bitcoin exchanges enforce KYC and once you give them your private information they then link whatever bitcoin you buy to that identity. Forever. From there the exchange, the government, third parties and Chain Analysis firms…

• Track what you spend your money on
• Track what your balance is
• Track what taxes you should be paying
• Sell all this information to other companies without telling you
• You get the picture

KYC Exchanges seriously damage your privacy and security and should never be used. Thankfully we have a fantastic Crypto Exchanges list that you can use to find the best place to buy Bitcoin safely and privately so check it out!

Start Out Small & Practice

Once you have your Private Wallet downloaded and have chosen the place you’ll buy your bitcoins from, make sure you start small and practice! There’s no “minimum investment amounts” with Bitcoin. You can literally buy $1 if you want to so you don’t need to invest thousands just to learn.

We recommend buying a small amount (say $20) and using it to get experience with how the exchange trading platforms work, how you send and receive bitcoins using your new wallet and just how Bitcoin works in general.

As stated, it’s quite different to what you might be used to with traditional financial systems (in a good way!) so practicing and making any mistakes with small amounts helps to reduce risks and increase Understanding.

Don’t Touch Shitcoins

Thou shalt not put all thy eggs in one basket

One of the biggest and most common mistakes many intelligent investors make when starting out with crypto is to want to “diversify” their crypto portfolio by buying some of the other cryptocurrencies out there instead of just Bitcoin. These other cryptos are called altcoins or shitcoins.

Diversifying your portfolio is an age old and very prudent investment strategy that ensures you don’t risk everything on just one asset. The key mistake people make though is thinking that it’s safe to diversify across these other shitcoins.

We are focused on Bitcoin only for a very good reason. We believe investors should only focus on Bitcoin, Not Crypto and that these other coins are extremely risky and not what they claim to be, with many of them being outright fraudulent or scams.

This is our personal belief and you’re free to believe something else. This is not financial advice either. But we have studied Bitcoin and cryptocurrencies for over half a decade and this belief has very solid evidence behind it.

This is a chart showing thousands of these shitcoins all going to zero while Bitcoin soars above them. Also note, these are the top coins. There’s 10,000+ worse ones. We’ll leave it up to you to determine whether you think investing in them is worth the risk.

Decide On An Investment Strategy

Thou shalt not squander long-term returns by incurring frequent trading commissions or excessive management fees

FOMO. Going “all in”. Apeing. Wen Moon? There’s dozens of degenerate gambling sayings to encourage and idolise day trading but it’s no different from any other form of asset speculation. Whether it’s Penny Stocks from last century, current stocks today or tulip bulbs time has taught us that it’s just a different (and no less risky) form of gambling.

The constant buying and selling also hugely increases your Bitcoin Carrying Costs and destroys much of your profits all while taking more effort on your part. How you buy, sell and trade your bitcoins is up to you, but make sure you decide up front what you’re really doing before you start and don’t get sucked in by “influencers” pumping their next shitcoin. Know the differences between proper investing and speculation and importantly how the risks relate to you.

Thou shalt have the patience of a nesting hen

A good Bitcoin strategy for beginners is just simply to buy some and wait. We can’t tell you how many bitcoins to buy as that’s considered financial advice. But while you’re waiting you can learn more about the Characteristics Of Bitcoin, Bitcoin Mining or Why It Was Created.

Creating an investment strategy and sticking to it also helps remove emotions and common investment biases from your decision making process and encourages better asset management.

Understand & Manage The Risks

Thou shalt take on risk commensurate with thy ability to sleep well at night

Bitcoin is an incredible new invention, technology and money that has the potential to change the entire world over the next 50 years, potentially even more so than the Internet has. But. It’s not without its risks and problems.

While there’s lots of Fear, Uncertainty and Doubt (FUD) thrown about mostly by news outlets that don’t really understand how Bitcoin fundamentally works, there are still legitimate risks when it comes to investing in it. These include things like:

• No Insurance Guarantee
• Protocol Risk
• Fraud / Bankruptcy Risks
• Regulation Risks
• Hacking Risks
• Fungibility

We go into significant detail on each of these important points in our seminal piece What Is A Bitcoin, but in short it just means that you need to make sure you’re not investing more than you can afford to lose.

Thou shalt know that past performance is no guarantee of future results

Bitcoin is new and highly volatile compared to other more traditional assets classes like real estate or stocks (2022 not withstanding!). So be prepared for huge ups and downs plus always remember the past is the past and there’s no guarantee that it will “go to the Moon” again.

Watch Out For Scammers

As with anything that has to do with money, be cautious of Bitcoin Scams. We feel the best defense against this is learning about Bitcoin in detail so you can spot when things seem wrong. It’s also beneficial to practice good IT security in general and also be well versed in the most common scams that happen in the industry.

Scams come in many different shapes and sizes and we’ve already outlined exactly how to recognize and avoid them in the above piece. Consider it mandatory reading before you start investing any serious amounts of money.

Practice Continuous Learning

While Bitcoin is quite simple at its core, like many other “simple” things in nature it spawns highly complex and dynamic systems over time. While understanding everything to do with Bitcoin isn’t needed to use or invest in it, it’s good to always continue to learn new information bit by bit.

Of particular note is your Bitcoin Privacy and properly understanding the Proof-of-Work (PoW) mechanism that Bitcoin mining uses. Further reading might include:

• Difference Between Bitcoin And Blockchain
• Difference Between Bitcoin And Crypto (Altcoins)
• The difference between a seed phrase, address, private keys and public keys
• Understanding how Bitcoin Transaction Fees work

Whatever content interests you Bitcoin has many diverse, fascinating and deep rabbit holes to get lost down. So make sure you don’t just stop here. Keep reading and learn why Bitcoin really does fix everything.

FAQ