Bitcoin Fraud and Scams.
Do you know what is a bitcoin ? BitCoin is a revolutionary digital currency with the potential to take over all the other national currencies and establish itself as the global currency. But there are certain aspects of this new form of currency which stops many people from using it. The origin of this currency is still under dark shadows. No one knows who its actual developer was. Only speculations can be made about how its algorithm was developed. The known developer of BitCoins is Satoshi Nakamoto which is a pseudo name.
The currency is not regulated and anyone can use it to make a transaction worldwide. The currency is also a threat in many ways because of the possibility of money laundering and other illegal activities that can be done using BitCoins. The transactions of BitCoins do not leave any traces which means that it is very difficult to track down a transaction made via bitcoin wallet.
BitCoin system has some weaknesses which can be exploited by hackers. Recently a very powerful BitCoin exchange company Mt. Gox suffered huge losses and had to file for bankruptcy protection due to one such weakness of the system. The company claimed that it lost nearly 850,000 Bitcoinsthat was worth $477 million due to a weakness of the system. Mt. Gox happened to be the most influential company for exchange of BitCoins to various other currencies in a secure and reliable manner. It the claims of the company are to be believed, BitCoins are under constant threat of scams and frauds.
Follow the right BitCoin rules and you will avoid scams option
BitCoins are stored online in e-wallets. Most of the experts believe that if you follow the rules of transactions of BitCoins, there is no way you can be scammed. However, if you try something different based on trust on some person you met online and whom you don’t even know, you are flirting with danger. Something similar happened with JamieRussell, a Wisconsin man, who lost about $150000 after trying to exchange a part of his digital currency balance with physical bitcoin tokens.
Russell had been investing in BitCoins since it was trading at a price level of $5. After transferring the BitCoins, Russell was cut off from any sort of communication by the scammer. The matter was reported to the police but as mentioned earlier it is very difficult to link BitCoin transactions to a real person.
Another case of BitCoin fraud came up in Canada where an online BitCoin bank named Flexcoin suffered a loss of about $600,000. The company claimed it was attacked by a hacker team which took off with a big amount of BitCoins. The company claimed that it was in no position to recover from the attack and had to shut down. The Canadian police is currently looking into the matter.
BitCoin is still in its early phases and its price level has witnessed a lot of fluctuation in the past. Sometimes the price level of one unit of BitCoin has escalated by 50 times in just a few months and sometimes it has fell down to half the peak value in just a month. There are security risks as well. The hacking attacks are a very serious threat. But amid all this BitCoin continues to gain popularity.
Department of Defense to Investigate Bitcoin’s Terrorism Potential
Department of Defense to Investigate Bitcoin’s Terrorism Potential, BitCoins can be used to make anonymous transactions without the US intelligence not knowing about it.