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The Trouble With Bitcoin – Recent $5 Million Hack

January 13, 2015

If you’re like most online sports bettors, you’ve probably at least been interested in Bitcoin. They are the world’s largest crytocurrency and have been active in the online gambling community. However, despite its presence within the online gambling community, there are some problems with Bitcoin that you simply should not ignore. For starters, something very bad compromised Bitcoin’s reputation recently. Just after the new year, $5 million was stolen from the Bitcoin exchange called Bitstamp.

When something like this happens, which will probably occur more frequently than you would expect, the value of Bitcoins will take a significant drop in value. So let’s say you find an online sportsbook that accepts Bitcoin deposits. You then go and make some money betting on games and, when it comes time to cash out your winnings, you discover the value of your Bitcoins are significantly lower than when you made your deposit. So it turns out you didn’t win as much as you thought. You’d be extremely disappointed. Don’t think that will ever happen? Think again. It just did and it could again in the near future.

Bitstamp suspended service temporarily

After Bitstamp’s operational wallets were hacked, about 19,000 Bitcoins were stolen. The value of those Bitcoins was approximately $5 million (1 coin = $270). Subsequently, as expected, Bitstamp temporarily suspended service while investigating the issue. At the end of the day, the company was essentially out about $5 million and the value and future of Bitcoins were left in doubt.

To Bitstamp’s credit, they immediately issued a statement assuring customers that the balances held prior to the service suspension will not be affected and will be honored in full. Let’s hope they aren’t just blowing smoke there. However, even if they do stick to their words, it’s still an inconvenience for customers.

This isn’t the first Bitcoin hack

As we mentioned earlier, there is always a risk of a cryptocurrency company getting hacked and money stolen. This wasn’t the first time this has happened and it won’t be the last. In 2013, hackers robbed the currency of about $1.2 million worth of internet coins. The company did bounce back well from this loss, but it was another inconvenience for customers.

After the 2013 incident, many investors decided to steer clear from Bitcoin and the entire digital currency market. That hasn’t prevented Bitcoin from making its way into the world of online gambling. There are gambling sites out there that only accept internet money as a form of deposit and withdrawal. Those sites should be avoided like the plague.

Trust your money on standard currency gambling sites

Whether you bet on sports, poker, or other casino games online, you should only trust your money on websites that accept deposits via standard currency (debit/credit cards, PayPal, etc.). That doesn’t mean you should avoid a website that accepts bitcoins, but stay away from sites that only accept bitcoins as a deposit method.

Those sites simply can’t be trusted because you just don’t know what the future holds for cryptocurrency. If the coin tanks, you’re out your money. Therefore, we recommend using sites such as YouWager.eu, and TopBet.eu because those sites are risk-free and allow members to deposit with standard currency.

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