What is Cryptocurrency and What you Need to Know

Cryptocurrencies Bitcoin What to Know
Cryptocurrencies Bitcoin What to Know

Cryptocurrency, also called virtual currency or cryptocurrency, is digital money. That means there are no physical coins or bills – everything is online. You can transfer a cryptocurrency to someone on the internet without an intermediary, such as a bank. The best known cryptocurrencies are Bitcoin and Ether, but new crypto-currencies continue to be created.

People could use cryptocurrencies to make quick payments and to avoid transaction fees. Some people might acquire cryptocurrency as an investment, hoping that it will increase in value. Cryptocurrencies can be purchased with a credit card or, in some cases, through a process called “mining”. Cryptocurrencies are stored in a wallet or digital wallet, either online, on your computer, or on another physical medium.

Before buying a cryptocurrency, you have to know that it does not have the same protections as when using US dollars. You also need to know that scammers are asking people to pay you with a cryptocurrency because they know that those payments are usually irreversible.

Cryptocurrencies versus US dollars

The fact that cryptocurrencies are digital is not the only important difference between cryptocurrencies and traditional currencies like US dollars.

Cryptocurrencies are not backed by a government.

Cryptocurrencies are not insured by the government like bank deposits are in the US That means that cryptocurrencies stored online do not have the same protections as money deposited in a bank account. If you store a crypto-currency in a wallet or digital wallet provided by a company, and the company ceases operations or suffers a cyber attack, the government may not be able to act and help you recover the money as it could with the money. that is kept in banks or credit unions.

The value of a crypto-currency is constantly changing.

The value of a cryptocurrency can change every hour. An investment that today may be worth thousands of dollars tomorrow could be worth only hundreds of dollars. If the value goes down, there is no guarantee that it will go up again.

Are you about to invest in cryptocurrencies?

As with any other investment, before investing in a cryptocurrency, know what the risks are and learn how to spot a scam. Here is a list of some of the things to watch out for when considering your options.

No one can guarantee that you will earn money .

Anyone who promises you a guaranteed yield or dividend is likely a scammer. Just because an investment is well known or endorsed by a celebrity doesn’t make it a good or safe thing to do. That applies to cryptocurrencies as well as more traditional investments. Don’t invest money that you can’t afford to lose.

Not all cryptocurrencies – or companies promoting cryptocurrencies – are the same.

Take a look at the statements that companies promoting cryptocurrencies are making. Search the internet by entering the name of the company and the cryptocurrency and add words like “review”, “scam” or “complaint”, if you search in Spanish, add words like “comment”, “scam” or “complaint” .

How to pay with a cryptocurrency

If you are thinking of using a cryptocurrency to make a payment, know that there are important differences between paying with a crypto-currency and paying with traditional methods.

When you pay with a cryptocurrency, you don’t have the same legal protections.

If something goes wrong, credit cards and debit cards have legal protections. For example, if you have to dispute a purchase, your credit card company has a process to help you get your money back. Cryptocurrency payments are generally irreversible. Once you pay with a cryptocurrency, you can only get your money back if the seller sends it back to you.

Before buying something with a cryptocurrency, find out the reputation and address of the seller and how to contact him if a problem arises.

Refunds may not be in cryptocurrency.

If they offer you refunds, find out if they will be in cryptocurrency, US dollars, or another type of currency. And what will be the amount of your refund? The value of a cryptocurrency is constantly changing. Before you buy something, find out how the seller calculates refunds.

Some of the information is likely to be public.

Although cryptocurrency transactions are anonymous, the transactions can be posted to a public ledger, such as a Bitcoin blockchain. A blockchain is a public list of records that shows when someone makes a transaction with cryptocurrencies. Depending on the crypto-currency, the information added to the blockchain can include data such as the amount of the transaction. The information can also include the addresses of the sender’s and receiver’s wallet or wallet – a long string of numbers and letters linked to a digital wallet or wallet that stores cryptocurrencies. Both data, the amount of the transaction and the addresses of the purse or wallet could be used to identify the people who are using it.

Cryptocurrency scams

As more people are interested in cryptocurrencies, scammers are finding more ways to use them. For example, scammers might offer investments and business “opportunities” promising to double your investment or give you financial freedom.

Beware of anyone who:

  • Guarantees that you will earn money.
  • Promises you high returns that will double your money in a short period of time.
  • Promise you money for nothing in dollars or cryptocurrency.
  • Make confusing statements about your company.

Crypto pirate

Crypto piracy is when scammers use the processor power of your computer or smartphone to “mine” cryptocurrencies for their own gain and without your permission. Just by visiting a scam website, malicious code can be placed on your device. With that, they can then access your device’s processor on their own without your noticing.

If you notice your device running slower than normal, draining your battery capacity quickly, or crashing, your device may have been hacked. Do the following:

  • Close sites or apps that slow down your device or drain your battery.
  • Use anti-virus software, set software and applications to update automatically, and never install a program or application that you think is unreliable.
  • Don’t click on any links without knowing where it leads and be careful about visiting unfamiliar websites.
  • Consider installing a browser extension or ad blocker that can help defend against crypto-hacking. But first, do some research. Read reviews and consult reliable sources before installing any tools available online. Some websites may prevent you from using their site if you have a software blocker installed.

Report scams

Report fraud and other suspicious activity involving cryptocurrencies, or other digital assets to:

  • The FTC at ftc.gov/complaint.
  • The Commodity Futures Trading Commission (CFTC) by calling 866  366  2382 or at CFTC.gov/TipOrComplaint.
  • The US Securities and Exchange Commission (SEC) available at sec.gov/tcr.

Probably you wanna read:

Bitcoin: Its Origin, Functionalities, and Risks of the Virtual Currency

Morgan Stanley is the first US bank to offer Bitcoin to its clients

Bitcoin Hits $ 41,000 This 2021: Analysts Believe it May Displace the Gold