Increasingly, have you been hearing more and more about crypto-currencies?
… which is one form of crypto currencies, has become part of our language. Yet most of us do not know what crypto currencies are and how they work.
This is a link to a short BBC feature which explains in a simple manner what crypto currencies are and how they work: https://www.youtube.com/watch?v=SzAuB2FG79A
Gemma.gov.mt counsels that unless you understand the Bitcoin futures market you should keep away from investing in crypto currencies. The prices were relatively steady for this “crypto currency” from 2014 through most of 2017 before they started to spike in early 2018.
This run up on Bitcoin was all over social media, and people were getting into investment fever. Plenty of people started buying bitcoin without actually understanding the underlying structure or value of this crypto currency.
Prior buying Bitcoin or assets associated it, we suggest you to keep the following in mind:
- Bitcoin and other virtual currencies are not regular money and are not backed by the United States or any other government or central bank.
- Carefully investigate the seller prior making a purchase of Bitcoin to know what recourse you would have if something goes wrong.
- Compare the fees and costs associated with Bitcoin purchases and get details on the terms for redeeming Bitcoin into regular money.
- Virtual wallets that store Bitcoin do not provide the same safeguards as deposits made at traditional banks; thus, unrecoverable losses may occur if Bitcoin is stolen from these virtual wallets.
- Bitcoin values fluctuate enormously and may do so in short periods of time; you should prepare for radical value changes in Bitcoin investments, including single-day drops.
- Bitcoin investing is considered to be highly speculative, since the value is not related to any economic or financial parameters; it is advisable not to speculate with money that you cannot afford to lose.
- Bitcoin and other virtual currencies are based on public ledgers called blockchains, which are still experimental and subject to changes, errors and/or criminal activity that may adversely affect virtual wallets or erase Bitcoin value.
- The unregulated and ambiguous nature of Bitcoin is fertile ground for investment scams and other financial fraud, which may cause investors to lose money.
- Some firms offer leverage of up to 50:1. Leverage multiplies your losses and potential profits and can have a significant impact on fees. It also places you at risk of losing more than your initial investment, meaning you could end up owing money to the firm.
|My Big Coin
|In early 2018, My Big Coin, a crypto currency scam that lured investors into sinking an alleged US$6 million, was sued by the U.S. Commodity Futures Trading Commission.
|Bitcoin Gold Wallet
|Duped investors out of US$3.2 million in 2017 by promising to allow them to claim their bitcoin gold. The website allegedly used links on a legitimate website (Bitcoin Gold) to get investors to share their private keys or seeds with the scam.
|CryptoCurrency Clipboard Hijackers
|A malware that switches addresses used to transfer cryptocoin with ones the malware controls - thus transferring the coins to the scammers instead.
|Presented itself as a place to exchange and trade bitcoin, but was ultimately fraudulent. The fake exchange took on part of the name of the real Korean Exchange (KRX), and scammed people out of their money by posing as a respectable and legitimate cryptocurrency exchange.