Using bitcoins as your chosen currency when dealing with transactions in the online marketplace may be easy to learn and deal with. However, the easiness and cheapness of bitcoins for transactions such as international payments has paved the way to possible abuses in bitcoin transactions.
Below are the recently identified styles of people who have tried abusing transactions when using bitcoins as their currency.
- Technical flaws – Bitcoin transactions are considered a peer-to-peer transaction, hence it may take roughly around 10 to 20 minutes before the transaction can be finalized and confirmed. With this, any person can manipulate a second payment using the same bitcoin amount and send it to a different recipient during the few seconds that the first payment is being confirmed. This can cause double-spent bitcoins.
- Dishonest pool organizers can take an unfair share of mining shares – Bitcoin mining can be best materialized through pooling, or a mechanism when joining a cluster of miners. Therefore, these pool organizers have the special privilege to choose how they would like to divide an amount of bitcoins that they have discovered. With this, pool organizers can acquire a bigger mining share for themselves.
- Mismanagement of online exchanges – Bitcoin transactions can be abused when the individuals who run online exchange platforms are dishonest. Dishonesty within online exchange platforms is possible since they are unregulated. More so, users are not covered with any insurance in case of loss when doing the transaction. Unlike traditional banking processes, bitcoin transactions do not have insurance coverage.
Keep in mind that you have an option to store your bitcoin wallet through either offline or online options. Offline storage can be a hard drive or a USB stick, while an online storage can be a cloud service. However, if you own more than one or two bitcoins, the offline storage is more advisable to use it is more hacker-resistant. The only threat to this offline storage is when you accidentally delete your bitcoin wallet in it.
While bitcoin transactions are prone to abuses, you can still protect yourself as a bitcoin user. You need to be extra careful so as to avoid being a victim of scams in any type of bitcoin transactions.