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.
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