What To Know About Cryptocurrency and Scams | Consumer Advice

what you should know about cryptocurrencies

what is cryptocurrency?

Cryptocurrency is a type of digital currency that generally exists only electronically. you usually use your phone, computer or a cryptocurrency ATM to buy cryptocurrency. bitcoin and ether are well known cryptocurrencies, but there are many different cryptocurrencies and new ones are still being created.

How do people use cryptocurrencies?

People use crypto for many reasons: quick payments, to avoid transaction fees traditional banks charge, or because it offers some anonymity. others hold cryptocurrency as an investment, hoping its value will rise.

Reading: Can you get bitcoin back

How do you get cryptocurrencies?

You can buy crypto through a crypto exchange, app, website, or ATM. Some people earn crypto through a complex process called “mining,” which requires advanced computer equipment to solve very complicated math puzzles.

Where and how are cryptocurrencies stored?

Cryptocurrency is stored in a digital wallet, which can be online, on your computer, or on an external hard drive. A digital wallet has a wallet address, which is usually a long string of numbers and letters. If something happens to your cryptocurrency wallet or funds, such as your online exchange shutting down, sending cryptocurrency to the wrong person, losing your digital wallet password, or your digital wallet being stolen or compromised, you are likely that you find that no one can step in to help you get your funds back.

How are cryptocurrencies different from American ones? dollars?

Because cryptocurrency only exists online, there are important differences between cryptocurrency and traditional currency, such as US currency. dollars.

  • cryptocurrency accounts are not backed by a government. The cryptocurrency held in the accounts is not insured by a government such as the US. uu. dollars deposited in an fdic-insured bank account. If something happens to your cryptocurrency account or funds, for example, the company that provides storage for your wallet goes out of business or gets hacked, the government has no obligation to step in and help get your money back.
  • Cryptocurrency values ​​are constantly changing. The value of a cryptocurrency can change rapidly, even changing every hour. and the amount of change can be significant. It depends on many factors, including supply and demand. Cryptocurrencies tend to be more volatile than more traditional investments like stocks and bonds. An investment worth thousands of dollars today might be worth only hundreds tomorrow. and if the value goes down, there is no guarantee that it will go up again.
  • pay with cryptocurrency?

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    There are many ways that paying with cryptocurrencies is different from paying with a credit card or other traditional payment methods.

    • Cryptocurrency payments do not come with legal protections. Credit and debit cards have legal protections if something goes wrong. For example, if you need to dispute a purchase, your credit card company has a process to help you get your money back. cryptocurrencies do not normally come with such protections.
    • Cryptocurrency payments are generally not reversible. Once you pay with cryptocurrency, you can usually only get your money back if the person you paid pays you back. Before you buy anything with cryptocurrencies, find out the reputation of the seller by doing a little research before paying.
    • some information about your transactions is likely to be public. people talk about cryptocurrency transactions as anonymous. but the truth is not so simple. cryptocurrency transactions will usually be recorded on a public ledger, called a “blockchain”. that is a public list of all cryptocurrency transactions, both on the payment and receipt side. Depending on the blockchain, the information added to the blockchain may include details such as the amount of the transaction, as well as the sender’s and recipient’s wallet addresses. Sometimes it is possible to use transaction and wallet information to identify the people involved in a specific transaction. and when you buy something from a seller who collects other information about you, like a shipping address, that information can also be used to identify you later.
    • how to avoid cryptocurrency scams

      Scammers are always finding new ways to steal your money using cryptocurrencies. To stay away from a crypto scam, here are some things to know.

      • Only scammers demand payment in cryptocurrency. No legitimate business will require you to send cryptocurrency in advance, either to buy something or to protect your money. that’s always a scam.
      • Only scammers will guarantee profits or big profits. Do not trust people who promise that you can make money quickly and easily on crypto markets.
      • never mix online dating and investment advice. If you meet someone on a dating site or app and they want to show you how to invest in crypto or ask you to send them crypto, that’s a scam.
      • spotting crypto-related scamsscammers are using some tried and true scam tactics, only now they are demanding payment in cryptocurrency. Investment scams are one of the main ways scammers trick you into buying cryptocurrency and sending it to scammers. But scammers also pose as businesses, government agencies, and a love interest, among other tactics.

        investment scamsinvestment scams often promise you can “make big money” with “zero risk” and often start on social media or online dating sites or apps. line. These scams, of course, can also start with an unexpected text, email, or call. And, with investment scams, crypto is central in two ways: it can be both the investment and the payment.

        Here are some common investment scams and how to spot them.

        • a so-called “investment manager” contacts you out of the blue. They promise to make your money grow, but only if you buy crypto and transfer it to your online account. the investment website you are directed to looks real, but it is actually fake, just like its promises. if you log into your “investment account”, you won’t be able to withdraw your money at all, or only if you pay high fees.
          • a scammer poses as a celebrity who can multiply any cryptocurrency you send them. but celebrities don’t communicate with you through social media. he is a scammer. and if you click on an unexpected link that sends or sends cryptocurrency to a supposed celebrity’s qr code, that money will go straight to a scammer and disappear.
          • An online “love interest” wants you to send them money or cryptocurrency to help you invest. That’s a scam. As soon as someone you meet on a dating site or app asks you for money or offers investment advice, know this: that’s a scammer. tips and offers to help you invest in cryptocurrencies are nothing but scams. if you send them cryptocurrency or money of any kind, it will be gone and you will not usually get it back.
          • scammers guaranteeyou’ll win money or promise big payouts with guaranteed earnings. Nobody can give those guarantees. much less in a short time. and there is nothing “low risk” about cryptocurrency investing. So: If a company or person promises to make a profit, that’s a scam. even if there is a celebrity endorsement or testimonials from satisfied investors. those are easily faked.
            • scammers promise free money. they promise free cash or cryptocurrencies, but the promises of free money are always false.
            • Scammers make big claims without details or explanations. Regardless of the investment, find out how it works and ask questions about where your money is going. honest investment managers or advisers want to share that information and will back it up with details.
            • See also: Fig Propagation: How To Start A Fig Tree From A Cutting

              Before investing in cryptocurrencies, search online for the name of the company or person and the name of the cryptocurrency, as well as words like “review”, “scam” or “complaint”. see what others are saying. and read more about other common investment scams.

              Business, Government, and Employment Impersonators In a business, government, or employment impersonation scam, the scammer poses as someone you trust to convince you to send them money by purchasing and sending cryptocurrencies.

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