Crypto is complicated. It's hard to understand and even harder to explain. And because of its nature and the fact that it's largely unregulated, there are a lot of, let's use a polite term here, misconceptions around crypto.

Without further ado, here are 4 things I wish I knew when I started with crypto. In random order.

4. Contents of a hardware wallet are STILL online

The contents, in other words the coins and tokens, stored in a hardware wallet are still being held online, on the blockchain, same as a software wallet.

The crucial difference is, with a hardware wallet, your private keys are being stored OFFLINE. As opposed to a software / hot wallet, where your keys are online.

3. Bitcoin is NOT anonymous

Bitcoin (like most cryptos) is actually not anonymous, it is pseudonymous.

This is important because it debunks the argument that crypto is mostly used for criminal activities.

First and foremost, this is statistically not true.

But more to the point, transactions can be traced and audited in the blockchain in perpetuity. And your identity can be associated with transactions if you send crypto to an exchange.

2. The US Dollar is NOT backed by gold

This has more to do with FIAT than crypto but it is important to know because crypto skeptics often claim that "crypto is not backed by anything".

The fact of the matter is really depends on which crypto project they're talking about.

And more importantly, the US Dollar is not backed by anything either.

The Federal Reserve is actually a private company, and it doesn't have any reserves.

Today, in 2023, you can absolutely not redeem USD for gold. And this has been true for over 50 years.

In other words, the USD is backed by people's trust in the USA.

1. You don't actually own your crypto if you keep it in an exchange

Most people know this but let's just go over it again because it's better to err on the side of caution.

If you keep crypto in an exchange, you actually automatically relinquish ownership. At any given moment, for any given reason, the exchange can refuse to approve or carry out withdrawal requests.

If you absolutely have to keep crypto in an exchange, and this is just my opinion, Coinbase is probably the best option simply because it's a public company, and therefore under constant scrutiny.

Meaning, to put it bluntly, they're less likely to screw up.