Bitcoin

How To Stay Safe When You Use Bitcoin

  • Bitcoin is a crypto-currency that is starting to gain mass appeal because it allows users to make person-to-person transactions online without the need for an intermediary. This has proven extremely popular at darknet markets and at U.S. facing gambling sites because bitcoin payments cannot be censored or blocked. Using bitcoin is easy but like with any new technology there are also dangers and pitfalls that you should be aware of. Here are a few tips to help you keep your bitcoin safe.

    WALLETS.

    Fake wallets have started to appear in both the iTunes App Store and Google Play. They are also being advertised using Google Adwords, which makes them appear legitimate. These wallets and ads are removed as soon as they are reported but not before dozens of people have already downloaded them and lost their bitcoin. Only use well-known mobile wallets like BreadWallet, Coinbase, Mycelium, Xapo, Airbitz and Samurai Wallet.

    EXCHANGES.

    Exchanges like Bitstamp, Bitfinex, GDAX and Kraken are where you buy and sell your bitcoin. These websites are a target for hackers because they are holding a huge amount of crypto-currency at any one time. In the MtGox hack over 700,000 bitcoins were stolen and Bitfinex lost over 110,000 coins. To avoid having your bitcoin stolen, you should immediately move them to your wallet for safekeeping once you have purchased them.

    GAMBLING.

    Bitcoin gambling is the first mainstream use case for bitcoin and other crypto currencies. Bitcoin-only sportsbooks, poker rooms and casinos grew in popularity because they offered more competitive betting odds, lower poker rake and their casino games paid out more. Another advantage is that bitcoin transactions cannot to stopped or censored so they are an ideal means of payment for gamblers in the United States. As a result, every major US facing gambling site now accepts bitcoin, including Americas Cardroom, BetOnline, Bovada and 5Dimes.

    Unfortunately, setting up fake bitcoin gambling sites is much easier than setting up a traditional gambling site because you don’t need a merchant banking account to process credit cards. Instead you can just provide a bitcoin deposit address that links directly to your personal bitcoin wallet and you are ready to start accepting players. That is why we recommend that you only gamble at well-established brands like Nitrogen Sports, CloudBet, FortuneJack, BetCoin or any of the major legacy sites that now accept bitcoin.

    NO REFUNDS.

    If you buy a flat screen television from an online store and it never arrives, you can contact your credit card company and request a refund. It’s important to be aware that there are no refunds when you purchase with bitcoin and there is no call centre you can phone to complain. For this reason, you should only buy from reputable online retailers who have good returns policies. For example, companies like Dell, Microsoft and Expedia now all accept bitcoin and will refund your BTC if there are any problems.

    USE TWO FACTOR AUTHENTICATION.

    Two-Step verification makes it very difficult for hackers to steal your bitcoin because when you login to your wallet or exchange, you are asked to enter a number which is either texted to your phone or is supplied by the Google Authenticator app. Even if a hacker is able to steal your username or password, they will not able to login unless they get physical access to your phone.

    USE A HARDWARE WALLET.

    Hardware wallets are basically small devices that are used to keep your bitcoin safe by ensuring that your private keys never touch the internet. They are not necessary if you are only holding a small amount of crypto-currency but they are worth the investment if you have a percentage of your life savings in bitcoin. Popular bitcoin hardware manufacturers include Trezor and Ledger Wallet.

    BACKUP YOUR WALLETS.

    If you are using bitcoin wallets like Blockchain.info, Bitcoin Core or Electrum then it is advisable that you use the “Backup” facility in the software to make regular backups. If you do not make backups and your phone or PC gets stolen then you may lose all your bitcoin.