What you need to know
If you are going to explore Coinbit, there are some things you should know. One can exchange money using Coinbit, and the way it is exchanged is quite different from the one we are used to. Therefore, take time to learn about Coinbit before using it. Coinbit should be treated with even more care than your regular wallet!
Keeping your wallet safe
Your wallet must be secured with the same care as in real life. Coinbit helps to transfer money anywhere in an elementary way and allows you to be in control of your money. Such features also come with big security concerns. Coinbit can provide very high levels of security when used correctly. Always remember that it is always user’s responsibility to adopt good practices in order to protect his/her money. Read more about securing your wallet.
Coinbit price changes unpredictably
The price of a Coinbit is quite volatile due to its young economy, novel nature, and sometimes illiquid markets. Thus, keeping your savings with Coinbit is not recommended at this point. Coinbit should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Coinbit. After receiving payments with Coinbit, please keep in mind that many service providers can convert them to your local currency.
Coinbit payments are irreversible
Any Coinbit transaction cannot be reversed, though they can be refunded by the receiver. According to that, we strongly advise you to do business with people and organizations you know and trust. Businesses, in their turn, need to keep control of the payment requests they display to their customers. Coinbit can detect typos and won’t let you send money to an invalid address by mistake. In future, some additional services might appear, which would provide more choice and protection for the consumer.
The anonymity issue
Some efforts are required to protect your privacy with Coinbit. All Coinbit transactions are stored permanently and publicly on the network, which means anyone can see the transactions and balance of any Coinbit address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or under other circumstances. This is the only reason why Coinbit addresses should only be used once. Remember that your responsibility is to adopt good practices to protect your privacy. Read more about protecting your privacy.
Lack of security in unconfirmed transactions
Transactions don’t start out as irreversible. They get a confirmation score instead, that indicates how hard it is to reverse them (see table). Each confirmation takes average time of 10 minutes, though minimum and maximum of length are few seconds and 90 minutes respectively. Getting the first confirmation can take much longer if the transaction is a bit atypical.
|Confirmations||Lightweight wallets||Coinbit Core|
|0||Only safe if you trust the person paying you|
|1||Somewhat reliable||Mostly reliable|
|3||Mostly reliable||Highly reliable|
|6||Minimum recommendation for high-value coinbit transfers|
|30||Recommendation during emergencies to allow human intervention|
Coinbit is still under development
You should keep in mind that Coinbit is an experimental new currency which is still under active development. Coinbit is becoming more and more appealing with each improvement but is also revealing new challenges as Coinbit adoption is growing. During the development of the project, you may encounter growing pains such as slower confirmations, increased fees, or even more severe issues. Please keep yourself informed and be prepared for any complications. We strongly advise you to consult a technical expert before making any major investments.
Government taxes and regulations
Coinbit is not an official currency. Because of that, most jurisdictions would still require you to pay income, payroll, sales, and capital gains taxes for anything that has value, including Coinbits. It is your responsibility to ensure that you strictly follow tax and other legal or regulatory mandates issued by your government.