27 Dec 2008 - After a quiet start, 2008 exploded into a global financial earthquake.
Virtual currency, or “cryptocurrency”, that first appeared on the radar in 2009 after an anonymous creator “buried” 21 million coins online.Bitcoin's creator never came forward. The currency was published under an anonymous pseudonym. is it a coincidence?
Coins can only be accessed, or “mined” by solving complex computing problems. As each block of coins gets mined, the problems become harder and harder, requiring increased computing grunt. This limits the supply of the coins.
As of January 2014, around 11 million coins have been mined.
Bitcoin is the world’s first decentralised currency, which means it isn’t controlled by any government or bank. This has its advantages: you can transfer Bitcoins tax-free, and transactions are usually free, or relatively low cost.
cryptocurrency more than doubling in value over the calendar year. In fact, it wasn’t even close, as bitcoin’s 126% gain far outpaced the likes of Brent crude oil (53%), sugar (30%), silver (18%), and the S&P 500 (10%). Even more astounding, the dollar price of one bitcoin has increased from just $0.06 in July 2010 to $1,182 as of February 24, 2017.
In January 2013, one Bitcoin was valued at around $14. In November 2013, that value peaked at $1,124 but plummeted to $539 the following month.
This currency is private and totally anonymous, which has prompted a surge in users choosing Bitcoins to pay for illegal goods, primarily through the online darknet marketplace Silk Road.
The popularity of Bitcoin has opened the door for several other cryptocurrencies. Litecoin, Dogecoin, Peercoin, Quarkcoin have all sprung up in recent years.
In the interest of making this cryptocurrency a bit less cryptic, we posed one simple question – “Is bitcoin safe?” –
The perceived value of any currency is based on what is standing behind it. For example, the dollar has the reputation and the history of the U.S. economy under-pinning the value. It has been a while since we have had a precious metal (gold or silver) as a basis for our currency. That said we still have the history and reputation of the country supporting the dollar. In the European Union, they have a similar foundation for the Euro.
Bitcoin has no such under-girding. The only value is a perceived value by those who use it.
this is like trading in stock of a company who has no product or service, only stock. People will argue that bitcoin is not like stock, but is a currency and therefore will always have value. This is a false assumption since there is nothing standing behind the value of Bitcoin.
We have all seen currency being devalued overnight even if there is a government standing behind it. Also, all it would take is a major country to declare Bitcoin illegal because it supports money laundering or some other reason, to cause the value to drop.
Bitcoin has been the launching point for a lot of scams. The technology itself is innocent.
The seemingly random nature of the Bitcoin-related crime is just one of a vast number of cases to have made national news in India over the past few years.
Bitcoin has been around for about five years, but it was in 2013 that it started to move from the tech chatrooms into the public consciousness – helped by a high-profile news story in November about a man who realised that the computer hard drive he had chucked out contained bitcoins worth £4m, and was in a landfill site in south Wales.
A virtual currency (AKA "cryptocurrency") can be bought on an exchange using conventional money and then transferred to your personal digital "wallet". You can then use this "money" to pay for goods and services – mainly drugs and porn, some claim – or convert it back into pounds, dollars or whatever. The "coin" doesn't exist physically – it exists only as a computer file.
Every user requires a bitcoin wallet to store their funds and to send and receive payments. There are four main types of wallets for bitcoin, namely; hardware wallets, web wallets, desktop wallets, and mobile wallets.
Scammers, seeing the high demand for mobile wallets, have started to create fake wallets to defraud people. The fake bitcoin wallets usually have a name that is very similar to legitimate and trusted wallets such as Coinbase or Mycelium and, in some cases, even the same logo. These copycat tactics trick the user into downloading it believing it is the legitimate company’s wallet. Some fake wallets have crept onto the Apple and Android stores masquerading as genuine wallets.
Another way that fake wallets get customers is by promising greater transaction anonymity.
The way wallet scams work is that the user downloads the mobile wallet and starts to use it. It usually works for a while, but once the amount stored in the wallet reaches a certain threshold, it is moved out of the wallet leaving the user empty handed.
Unfortunately, scammers know how to leverage your emotions, whether they target greed by offering "high investment returns" or, as in the case of donation scams, people’s compassion for others.
Phishing scams involve sending out emails with the intention to steal personal information. Bitcoin phishing scams usually involve a user receiving an email where they are informed they won bitcoins but to collect their coins; they are required to log onto their wallets through a link in the email body. Once this happens, the user puts his or her wallet username and password onto the fake wallet site and, thereby, loses access to their wallet and the bitcoin held therein as his login information gets stolen by the scammers.
Bitcoin exchanges are services provide users with a marketplace that allows them to trade bitcoin for fiat currency or other cryptocurrencies. However, there have also been instances of fake exchanges in the bitcoin economy.
Fake exchanges swindle users by asking them to put a payment in that goes to the purchase of bitcoin. However, the exchange does not remit anything to the user. These exchanges usually attract customers by having lower credit card processing fees than their competitors.
Cloud mining scams are websites that state that they are offering cloud mining services without actually conducting any cryptocurrency mining. Generally, these sites pay users out for a period after they have purchased a fake cloud mining contracts for more than the payouts they are receiving. Then, after some time, the fake cloud mining company stops paying out, and users’ funds disappear. In other words, fake cloud mining operations are simply Ponzi schemes that pay out as long as more users are attracted to the service and are buying fake mining contracts. Once the amount of new paying users dries up, the scammer disappears with the funds.
Today, however, there is a broad range of bitcoin scams that are defrauding unsuspecting users.
