As Bitcoin has yet another day of wild price swings and widespread media coverage, this time because of the United States Senate, I suggest two reads for anyone interested in placing the Bitcoin phenomena in a historical perspective. The pertinent question that this poses is the following: “How did this happen?” Additionally, a dollar note serves no purpose other than to be exchanged for whatever value people are inclined to purchase for it. And if individuals conclude that they want to put their faith in the people who generate Bitcoins rather than in their government, this could become a practical alternative method of trade.
Stephen comes close to understanding why Bitcoin is different from the dollar, but only to a point. Perhaps the United States government demands payment in thousands and generates a direct money supply that Bitcoin or other cryptocurrencies can’t meet. On the other hand, the historical evidence demonstrates that the state is more involved in money than just forcing tax payments to be made in the state’s selected currency. This background is important in understanding potential future limitations of “private currencies” such as Bitcoin.
This is the subject of my greatest essay on the subject, Two Concepts of Money, published by the renowned British economist Robert Goodhart in 1998. Individuals interested in Bitcoin should read it, and I highly suggest it. Right now, Cryptocurrencies are essentially insignificant when compared to the bigger payment system, this official Site is used for that purpose, and those who predict it being widely used may wonder how certain they can be that private money of this kind will stay secret indefinitely. If it becomes popular enough to be considered a success, any such money will get more attention from policymakers than a brief Committee hearing would warrant.
- A governmental entity does not ensure the accounts associated with cryptocurrencies.
- Like bank accounts in which U.S. dollars are placed, the federal government still does not guarantee cryptocurrency accounts.
- Payments made with cryptocurrency must not come with any legal safeguards. For example, if you still need to dispute a transaction, your credit card issuer has a procedure to assist you in reclaiming your fund.
Payments Made With Cryptocurrency Are Generally Non-Reversible
If the cryptocurrency is a digital currency, this same information posted to the blockchain may contain data such as the transaction value and the wallet addresses of both the sender and the receiver. In that case, that information may be used to identifying you later on throughout the transaction.
How to Stay Away From Cryptocurrency Scams
Scammers are always inventing new methods to steal your identity through the use of bitcoin. Anyone who tells you that you’ll have to pay using bitcoin is most likely a scam artist. To be more specific, anybody who requests payment by debit card, gift certificate, or cryptocurrencies is a scam artist. In any case, once you make a payment, there is probably no way to have your money back. Here are some examples of bitcoin scams to be on the lookout for.
Scams Involving Investments and Business Opportunities
- Some businesses claim that you may make a lot of money in some short period of time and attain financial independence.
- Some fraudsters make unsolicited employment offers to assist in recruiting cryptocurrency investors, the sale of cryptocurrency, the mining of cryptocurrency, or the conversion of fiat money to bitcoin.
- Some fraudsters post fake job openings on job search websites. In exchange for your payment or personal information, they will offer you a job (for which there will be a charge).
Emails Used To Blackmail People
Most of the time, scammers will send emails claiming to have humiliating or incriminating photographs, videos, or confidential info about you. This is a kind of blackmail and extortion on the part of the government.
Scams On Social Media
According to the FBI, the message you get on social media or in a tweet, text, or email that instructs you to transfer bitcoin is a fraud. That is true regardless of whether the message was sent by someone you know or was tweeted by a personality you like. It’s possible that their social media profiles were compromised. Report the fraud to the social media site as soon as possible.