The world of cryptocurrency can be a dangerous one and its important to do a little research before using any of the many exchanges that exist out there…. Bittrex being one of them. There are questions you should look to find answers for beforehand. Questions like is Bittrex safe? What do they do to protect users accounts? Can you trust this place? Have they ever been hacked? and so on…
In this short post I’ll be going over all things I could find on Bittrex and its safety. But first I think its important to give a brief over view of what Bittrex is exactly.
What Is Bittrex?
Bittrex is a cryptocurrency exchange that facilitates transactions between buyers and sellers of many different cryptocurrencies. They provide a well laid-out and easy to use platform that anyone in the world can use to exchange crypto. Additionally they also provide wallets for each crypto they have on their platform so that you can also store you many cryptocurrencies on the exchange for added ease of use and liquidity.
They aren’t the oldest exchange out there but have been around for some time, having been founded in 2014. According to information provided by the BBB (Better Business Bureau) the exchange’s headquarters are based in Las Vegas, Nevada, although I’m sure they have employees all over the world like most exchanges do.
*No they are not based in Seattle Washington.
Is Bittrex Safe?
In the realm of cryptocurrency exchanges Bittrex is one of the safer choices out there as far as I see it.
Well because they are trustworthy, they have smart security measures in place, and they have a good track record. Of course there are some concerns but overall I don’t think anyone can argue that they are not at least one of the more safe choices.
Can You Trust Bittrex?
One of the biggest factors you have to consider when deciding whether or not to use and exchange is trustworthiness. Can you really trust this place? Do they do what they claim? Are they transparent?
The last thing you want to happen is run into another Mt Gox scenario where, for those who don’t know, bitcoin was being stolen out of users accounts which totaled around 740,000 bitcoins!
Fortunately for users of Bittrex, the exchange is based in the US which means it is subject to the US regulatory bodies. If you don’t live in the US you might not be aware of what goes on there but the gist of what you need to know is that regulations are tight.
Bittrex has to adhere to bot the laws of the SEC and the CFTC. These government organizations’s purpose is to protect consumers, and in this case traders that use the exchange. Now some people I know might be against how these places like to stick their fingers in everything but in this case they are providing what I believe to be a very necessary service.
When you start using exchanges outside of the US with more lenient laws things start to get a bit more worrisome. Take for example the whole Bitfinex Tether printing shenanigans where they were basically printing money and no one knew if what they were doing was legitimate because no one was checking in on them.
2 Factor Authentication (2FA)
Bittrex requires 2FA for account login, withdrawals, and API use. 2FA is an added layer of security that is intended to verify that the person trying to access the account has the authority to do so.
They use Google Authenticator for this and how it works is like this: You will have to download the Google Authenticator app on your phone and synchronize it with Bittrex, it will display random 6 digit numbers for 30 second intervals, and you will have to enter these changing numbers to get access. So if you are logging into your account you will have to enter your password and take this extra step to enter the number provided by Google Authenticator.
There is some controversy around how secure Google Authenticator actually is because it uses TOTP (not that you need to know this) but overall this definitely makes things much more secure and harder to hack.
Bittrex also keeps the majority of their crypto holdings in cold storage, as does many other exchanges like GDAX, Coinbase, etc. This is a safe practice that should be used by all places.
Cold storage means they store cryptocurrency that they keep in their accounts off of the exchange… or offline. This makes it unhackable even if the exchange is hacked. Of course they need to keep some on the exchange for liquidity so that the exchange can run efficiently, but they try to only keep the minimum needed.
Account support is worth looking at because if you ever run into problems being locked out of your account or something like this you will need help.
Fortunately Bittrex provides decent support compared to others. Unfortunately there isn’t much to compare it to because support when it comes to crypto exchanges as a whole is pretty awful.
But there is support there and they will help. Just don’t expect them to get back to you right away.
Has Bittrex Ever Been Hacked?
The Bittrex platform itself has never been hacked but there have been people who have complained that their accounts have been hacked into. Most of these hacked accounts were more than likely due to user stupidity but I’m sure some of them were hacked even though the users were doing everything right.
One common hack is known as “phishing”, which is were scammers will create a fake website, in this case a Bittrex site, that looks exactly the same but there will be a slight misspelling in the URL. They will trick people to logging into their accounts through the fake site where they will be able to steal information. Many people that have been hacked this way probably aren’t even aware this is what happened.
To avoid fishing attacks never click on adds in Google, Bing, etc for Bittrex and double check the URL (official URL is bittrex.com).
Now I know that hackers would also have to get passed the 2FA which seems nearly impossible but in rare cases it appears it has happened.
The bottom line is that with any exchange there is risk involved. Bittrex is as safe as it gets but hackers advance along with security measures and there is no FDIC insurance on cryptocurrency if you lose funds.
Bittrex does a lot to keep everything safe but there are some measures that you, the user, will also need to take. Three important tips I can give you include…
Tip 1: Create a massive password
The longer the better. And don’t make it something that makes sense. Just make it a bunch of random characters. I would say to make your passwords 15+ characters for Bittrex or any exchange just as a general rule of thumb.
Tip 2: Enable 2FA
This is a must and you will have to do it eventually anyhow when it comes time to withdrawal.
Tip 2: Check your email!
You will receive a login notification every time you login to Bittrex via email. If someone logs in without your permission you will still get this email and you will be able to disable your account from the email. This can save your butt if your account ever is hacked.
Final Thoughts on Bittrex – Should You Use This Exchange?
Bittrex provides all the standard safety measures that most exchanges provide, such as 2FA and keeping funds in cold storage, but they also provide more than this. In my opinion the fact that they are regulated in the US makes a big difference and this is one of the main reasons why I use Bittrex and will continue to until I have a good reason not to.
Something that is also nice to see that I didn’t mention is that some of the higher ups on the Bittrex team are members of the Executive Committee of the Chamber of Digital Commerce, where they keep up-to-date with the laws and regulations surrounding the industry. Being active with governing bodies is a must as far as I see it because they can make or break businesses in this industry. This somewhat gives you peace of mind that they are moving in the right direction and won’t clash with laws/regulations putting users at risk.
If you have an argument against using Bittrex or any information regarding hacks, lack or security, etc, please leave it in the comment section below so I can see what you have to say and possibly update this post to inform readers.