Home Finance 7 Mistakes to Avoid When Cashing Out Large Amounts of Bitcoin

7 Mistakes to Avoid When Cashing Out Large Amounts of Bitcoin

by Dangula Bingula

There has been a big increase in people in the last few years that are using Bitcoin and other cryptocurrencies. Also, many of them are trading with digital currencies like regular fiat money. That means that the market is slowly changing, and more people are interested in cryptocurrencies as a standard way of payment, not only as a potentially profitable investment.

However, there is still a large percentage of people who are only buying virtual assets because there is a chance to earn a lot if they become more valuable in time.

There are many benefits of investing in cryptocurrencies, and one of the most important, besides the chance to gain profit, is its transparency and convenience. Also, the main reason why Bitcoin, Ethereum, and other types of blockchain-supported currencies is that there are much smaller fees, unlike banks, where you will have to pay much more for regular transfers. If you are interested in trading online with Bitcoin, visit primeadvantage.

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Furthermore, with the rise in the popularity of Bitcoin, there is a great demand for using this currency. Also, there are many companies worldwide that started paying their employees on their e-wallets. Moreover, it is easy to cash out Bitcoin for any other fiat currency since there are more than 7,000 ATMs across the whole world with blockchain support. However, you should know about some mistakes that people make, and that could create many problems with the cashing out of Bitcoin. Here are the most common mistakes that you should avoid when cashing out large amounts of Bitcoin.

1.      Mixing Up Cryptocurrencies

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Like with cryptocurrencies, there are also various types of e-wallets, and you should know that many of them have limited support and can only hold particular types of currencies. For example, with a BTC wallet, you can only hold Bitcoin and Bitcoin Cash. However, if you try to send Litecoin, Ethereum, or any other type of coins, you might end up losing that money for good.

Also, you should never try to convert Bitcoin Cash to Bitcoin and the opposite by using the same address, since they are not compatible. The most important thing about transferring money safely is to check what type of cryptocurrency is currently selected in your e-wallet. You can easily switch between currencies.

2.      Paying too Low Transaction Fees

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While it is one of the main reasons why people are interested in Bitcoin, you should not use the cheapest exchange when you are transferring a large amount of money, even though you will save a lot in that process.

The main reason for that lies in the fact that you will have to wait much longer for the transfer since the exchange usually sets the priority for people who are willing to pay higher fees for faster process. You should use the Optimal Fee settings where you can find out the minimum value of fee for a priority transfer.

3.      Always Save a Backup File

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Many people see it as an issue that e-wallet can be used only on one device, your smartphone because it is convenient and much simpler than with PC.

However, you could end up with some problems in case you lost your phone and can’t remember the password of your account where you are holding crypto. Saving a backup file is crucial in that situation because no one could have access to your e-wallet without it. In that matter, save a backup file on some safe place, such as a digital wallet or password manager.

4.      Use of Two-Factor Authentication

There is always a chance for cyber-attacks, and hackers are constantly trying to find advanced ways of getting through various protection online.

There were some cases where hackers managed to break into security systems of online exchanges and stole Bitcoins and other crypto measured in millions of dollars. While every phone has a Google Authenticator, which seems as good enough to protect your data, you should go even further when it comes to your e-wallet and use two-factor authentication for advanced security.

5.      Falling for Bitcoin Wallet Scams

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There is always a fear of scams because they manage to steal more than $9 million every year. One of the most common scams is the M2M marketing where you are lured into investing in Bitcoin and other cryptocurrencies but never get in the chance to have one in your e-wallet.

You should pay attention to some offers that sound too good to be true, because, in most cases, they are, and you could end up with great losses. Also, when it comes to scams with regular wallets, the best way to avoid them is to get a wallet from a secured and well-known provider.

6.      Forgetting Password

It can become a serious problem if you forget your password without saving it with the manager. However, you can reset your password, but the process can last for a long time, and it can be stressful, especially when you are about to make some huge cash out. In that matter, be sure to always remember your password, or at least store it to some safe space where you can find it easily.

7.      Use Only Well-Known Exchanges

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As we already said, there are many potential threats that you should be aware of when you are using exchanges and transfers of cryptocurrencies. The best way to prevent any issues and scams is to register and use only trusted services and blockchain exchanges. You can easily find out what types of exchanges are safe by checking online about the experience of other people, and how many of them are using their services.

The Bottom Line

When looking at current trends, we can easily assume that the blockchain technology and market of cryptocurrencies will become a standard in most countries very soon. However, it is very important to be aware of any possibilities for a scam and learn how to avoid them. The best way for that is to use only trusted services and hardware from well-known producers and providers.

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