Bitcoin Mining traps: What not to do

For those considering getting into Bitcoin mining for the first time, or for those who are already wading in but feeling a lack of confidence, there are several lessons that can be learned from the veterans in the field. Of course, everyone wants to know what they must do to succeed and make a profit, but just as important is to learn what not to do to avoid catastrophe.

First of all, if you’re going to be mining and earning Bitcoin, it’s important not to store them all in the same wallet. Although wallets are typically built to be secure, even the best wallets can be lost or destroyed. For that reason, keep wallets backed up, keep some offline in cold storage, and don’t store all your Bitcoin in one place.

Similarly, whatever machine is being used to mine should be kept as secure as possible. If total strangers have physical or remote access to your source of wealth, there’s always a chance they’ll sneak some out. So don’t keep your mining rig in a location where the public, friends, coworkers or even untrusted family can get at it. Similarly, don’t install anything on that device which could make it vulnerable to digital attacks. Illegal and untrusted software could introduce vulnerabilities, and then your Bitcoin is just a couple of steps away from being forcibly withdrawn from your wallets.

Maybe you don’t want to operate your own mining hardware, but rather invest in the mining operation of someone else. If this is the case, be very wary of the possibility that any mining investment opportunity could be a scam. If the person or business you are giving money to isn’t of the highest reputation, and can’t prove a history of Bitcoin mining success, you might be throwing your money away. The golden rule is if it sounds too good to be true, it probably is.

More than anything though, don’t dive into the Bitcoin mining world without doing your homework. Many basic questions need to be answered to determine if you can set yourself up well to make a profit at mining, and then constant awareness of current news and trends is vital to stay on top of it. If you haven’t carefully looked into energy costs and the efficiency of hardware available to you, you aren’t ready to start mining. If you can’t stay well informed of price trends and the latest news in the industry, things can go south very fast.

Bitcoin mining can be a very profitable endeavor if done right. As long as you stay well informed, avoid potential disasters with some common sense precautions, and stay clear of thieves and scammers, it’s an enterprise that can help propel the world towards a new digital currency while making a few bucks for yourself.