If you haven’t heard the term “Bitcoin” floating around the news, now is the right time to figure out what all the fuss is about. Bitcoin is just one of several different forms of cryptocurrency, which is virtual money that actually ends up having real value.
If you think of games where you earn beans or gold bars or even extra lives, those things are fake cryptocurrency. They’re only useful within the game, letting you buy extra turns through the maze, extra powers that help you beat the next level or even game items like weapons or shields that help you win. It’s fake money that you earned by playing, and it only buys non-existent things.
The same could be said of cryptocurrency, but with a twist. Cryptocurrency can be “mined” online to increase your wealth, or traded in the same way that foreign currency can be exchanged. It can be used to pay for real things on certain websites; unfortunately, for a long time, cryptocurrency was the payment method of choice for illegal purchasing.
Bitcoin has made headlines lately for a variety of reasons. First, its value has skyrocketed, meaning traders can invest in Bitcoin and reap the benefits in actual dollars as the market value increases. There have also been a few high-profile cybercrimes that stole significant amounts of Bitcoin, such as two hackings that led to the closure of South Korea’s Youbit exchange.
But there’s another reason that everyday consumers need to be aware of Bitcoin, and that’s scams and fraud. Bitcoin has already become the preferred payment method of ransomware attackers, who demand payment in this currency to release your locked-up computer. There have also been fraud cases involving phony investment opportunities in this currency, so much so that the Securities and Exchange Commission has had to launch a fraud unit just to tackle cryptocurrency crimes.
There are other ways that Bitcoin scams and fraud can harm you, many of them involving phishing attempts. It might be a threatening letter claiming you or a loved one are required to pay to avoid physical harm—an issue that the FBI is already warning the public about—or another type of phishing, such as claims that you owe back taxes or haven’t paid a bill.
Basically, all of the common scams that required victims to pay with an untraceable payment method like prepaid debit cards or wire transfers can now be exploited in the same way, only using Bitcoin. It’s untraceable and anonymous and now highly valuable, which makes it the perfect tool for scammers.
The same rules for previous scams still apply: if you’re ever required to pay by an untraceable method, then it’s almost certainly a scam. Whether it’s iTunes gift cards or Bitcoin, there’s no legitimate reason why the person contacting you can only accept those forms of payment. Stop and think before you hand over your money or your personal information, and be on the lookout for this kind of fraud.
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