Before we conclude I want to leave you with these 5 golden rules which you should follow in ANY Bitcoin purchasing process. I hope you enjoyed this guide and feel free to ask any questions by contacting us and subscribing to our blog.
Rule #1 – Check the credibility of your Bitcoin seller.
When buying from an individual, validate their reputation by reviewing their trader profile if one is available. Ask for a Facebook, LinkedIn or any other social network profile in order to ascertain there’s an actual person behind the screen. As a rule of thumb, never buy Bitcoins from someone who you cannot account for their credibility.
If you’re buying at an exchange, check for the exchange name and the word “reviews”. Looking for reviews about exchanges and even individuals in the Bitcointalk forum can also provide valuable insights.
Rule #2 – Document everything
Since Bitcoin is somewhat untraceable like cash, in case of fraud it will be hard to prove specific allegations. Make sure you document your communication with the seller in a way that will be easy to present if needed later on.
Rule #3 – Wait for confirmation before paying
When dealing with individuals, for small to medium transaction it’s recommended to wait for at least one confirmation before submitting your payment. For larger transactions, wait at least 6 confirmations.
Rule #4 – Use escrow when needed
When conducting large transactions with individuals, use a Bitcoin escrow service to hold on to your funds until you receive the required amount of confirmations. This way your money will be in the custody of a trusted 3rd party until you receive the Bitcoins.
Rule #5 – NEVER leave your money at an exchange
If you’re buying Bitcoins at an exchange, make sure to move your Bitcoins to your own private Bitcoin wallet the moment you get them. NEVER leave Bitcoins inside an exchange; this can result in the loss of your Bitcoins due to theft or fraud.