Bitcoin is still a relatively new type of currency that is becoming popular with online sportsbooks and sports bettors. This highly volatile international currency offers bettors a funding source that they can easily utilize once they have setup their wallet from a provider and purchased Bitcoins from an exchange.
Bitcoin is attractive to many sports bettors for a few reasons. The first being if you are in a country that restricts financial transactions to offshore betting sites, such as the US, it allows you to get around such restrictions. In addition, as long as you take proper precautions, it is a safe way for bettors to finance their accounts.
Bitcoin must be purchased from an exchange and kept in a special Bitcoin wallet. If you’re in the US, you’d buy Bitcoin using US dollars, while those in the UK would do so with British pounds, in Europe they’d use Euros, etc. No government regulates this currency. Its current worth is tied to the marketplace.
Those two facts can make people wary of using Bitcoin. If you are going to use Bitcoin at your online sportsbook, it’s important that you follow certain procedures when buying and using this electronic currency. Here are five tips for using Bitcoin exchanges and five more for wallets.
Tip One – Security and Reputation Are Essential
Exchanges come and go and some are downright dishonest and fly-by-night. Go with an exchange that does a lot of business and has a solid history. Take time to check out an exchange before using it. Understand that many people deal in Bitcoin, buying and selling it as do they other currencies, to make money.
This is a relatively new currency and when purchasing it one can run into some pitfalls. An exchange that deals in high volume tends to have liquidity, which means fluctuations in the market will not affect the exchange’s price as much as it would if it were a smaller exchange.
Tip Two – Buying is Not Easy
The first time you go to purchase Bitcoin you may be a bit frustrated. It’s not as simple as purchasing an online item from an e-store. Your identity will have to be confirmed, as will other aspects of your life such as your address, method of payment, etc.
Tip Three – Purchases Are Public
All Bitcoin purchases are public, which means how much you purchased and other related facts may be discovered by anyone who wants to do so. If you’re uncomfortable with people and governments knowing your business, then Bitcoin may not be for you.
Tip Four – You May Be Taxed
You may be taxed by the government where the Bitcoin exchange is located. Remember that all purchases are public record. Before purchasing from an exchange, it is important to check out the tax laws of the host country
Tip Five – Fees Are Involved
Bitcoin exchanges exist to make money and they do so by selling this international form of electronic money and charging fees to the buyers. Thus, a fee that is based on a percentage of how much you buy will be added to your Bitcoin purchase. The more Bitcoin you buy, the smaller the percentage charged.
Tip One – Security and Reputation Are Essential
Like Bitcoin exchanges, security and reputation are an essential part of any Bitcoin wallet. You may be wondering if you need a Bitcoin wallet. Yes, such a wallet is where Bitcoin is kept. So if you are going to use Bitcoin, you will need a wallet.
If you want to be as anonymous as much as possible, search for a wallet that accepts minimal registration information, such as your email. At the same time, you do want a wallet that uses some sort of verification process, as this does offer you a certain amount of protection.
Tip Two – Private Keys
A wallet is not secure unless it has private keys. If your wallet does not have such keys, then you will not be able to access to your Bitcoins when you’d like to and you won’t be able to backup your wallet. Both of these features are important.
Tip Three – Hierarchical Deterministic and Transparency
Look for a wallet that does not allow address reuse. Get a wallet that is Hierarchical Deterministic (HD)? Such wallets will always demand that new Bitcoin addresses are used and that protects your privacy.
￼It is especially important that the company providing the wallet is transparent. You should know who they are and the manner in which they run the wallet. It should be an open source provider, which means that there will be an open source code. With an open source code, you can always review and investigate for any manner in which your wallet may be vulnerable. Such a code needs to be updated regularly for optimum security. If it is not open source, then there will be questions concerning if the wallet provider is securing your Bitcoins.
Tip Four – Make Sure It’s Backed Up
The wallet provider should provide a way for you to backup your wallet. Not being able to do so can put your Bitcoins in jeopardy. You do not want to lose your currency or have it compromised. It is virtually impossible to retrieve it if that does occur.
Tip Five – Ease of Use
Make sure that your Bitcoin wallet is easy to use. There’s a fine line between having a secure wallet and one that is simply confusing. By the way, you’ll have to make some decisions that will influence how easy your wallet will be to use. Consider how you will be utilizing your Bitcoins. As an example, you may want to access your wallet using with your mobile device. Does the wallet you’re considering permit this and does it do so easily?
Also, some wallets require that you be able to download an entire block chain, which takes time and will use up space on your computer. If you don’t want to deal with this type of procure then a thin client or webhosted wallet may make sense for you.
Bottom Line on Bitcoin Exchanges and Wallets
Before purchasing Bitcoin and securing a wallet, it is important that you do your research. Remember that setting up a wallet and buying Bitcoin is time-consuming and involves a certain amount of verification. Finally, make sure that both the exchange and wallet you use are safe and secure.