Category: Cyber Currency

What is Cyber Currency

Cyber currency is a form of digital money i.e. money that exists only in the digital world.

Currencies are a means of exchanging value e.g. I give you a gold coin and in return you give me some food. Coin based currencies switched to being paper based a long time ago to make life simpler. The £5 note in your pocket says … promise to pay the bearer the value of the bill but that has little meaning as we all accept paper currency has value and cannot switch back to using precious metals for all transactions.

Cyber currencies (or crypto currencies) have no paper version, no coins and no promise to pay anything. They exist purely in digital form and have no intrinsic value – only the value assigned by people according to how much supply and demand there is.

They are designed using cryptography i.e. codes which can make transactions tamper proof and ensure each unit of crypto currency cannot be spent more than once.

These currencies started out with very little value or interest except for anyone but people looking to the future when these currencies take over from the traditional.  Bitcoin originally was valued at less than 1 cent per coin but in 2021 reached over $60,000 per coin.

Also in 2021, the market capitalisation of all cryptocurrencies was more than $2 trillion. Some people who bought Bitcoin early on, made a fortune.

Stablecoins

These are less well known and are a variation on cryptocurrencies. They were developed to counter the price volatility of regular cryptocurrencies. The value of a Stablecoin is linked to something real world e.g. a standard currency. These are not backed by central banks, unlike the standard currencies. One of the best known is Gemini dollars.

The Benefits of Cryptocurrency:

  • There is no need for physical storage, safekeeping and shipping complexities
  • Can eliminate intermediaries and reduce the costs associated with cross-border transfers
  • Can make it possible to include groups of people who were previously excluded from the economy, by not having a bank account
  • Cryptocurrency transactions can avoid tracking by government or other authorities

The Danger of Hacking

Cryptocurrency cannot be physically stolen in the way that cash can be, but it can be hacked and exchanges where crypto currrency is traded have been a big target for this.

Criminals Love Bitcoin

As well as possible hacking, criminals love Bitcoin as payment for various illegal activities including ransomware which almost always demands the victim pay in Bitcoin thus making it near impossible to reverse the payment or identify who receives the money.

More recently criminals have changed to preferring Monero for illegal payoffs, but ransomware scammers still demand Bitcoin as its easier for most law abiding citizens to get if they want to pay the ransom.

If you have any experiences with these scams do let me know, by email.

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What is Digital Money

Digital Money / Cyber Currency / Blockchain / Bitcoin etc

Digital money (or digital currency) refers to any means of payment that exists in a purely electronic form. Digital money is not physically tangible like a dollar bill or a coin and Bitcoin is probably the best known digital money in use.

Digital money can also represent standard currencies, such as dollars or euros. Digital money is exchanged using technologies such as smartphones, credit cards, and online cryptocurrency exchanges.

Digital money has the potential to streamline the financial infrastructure of the world, making it cheaper and faster to conduct monetary transactions, easier to store money and legal to avoid the gaze of central banks and taxmen.

But it has severe limitations, many attempts at digital money will fail, criminals love cyber currencies,  some varieties of digital money create instability in the markets and it is possible that the huge tech companies will come to dominate this space.

The money held in your  online bank account can be called digital money – it’s just numbers on a computer.

The world is moving away from cash to digital money and Sweden is probably the furthest ahead in this move.

Sweden is expected to reach ‘cashless’ society by 2025, although they do admit that some retailers will continue to accept cash beyond that date.

Types of Digital Money

Central Bank Digital Currencies

Many governments around the world are struggling to understand digital currencies and how they can used without causing destabilisation.

Cryptocurrencies

Cryptocurrencies are the most common digital currencies and are based on cryptography. This is used to allow for anonymity, public ledger transactions and safe storage.

The most popular cryptocurrencies are Bitcoin and Ethereum. Cryptocurrencies are becoming fashionable investments and the overall market capitalization of crypto markets had by July 2021 surpassed $2 trillion.

Stablecoins

Stablecoins are a variation of cryptocurrencies and were developed to counter the price volatility of regular cryptocurrencies. The price is tied to that of a standard currency or a basket of goods to ensure that they remain stable. They can be a proxy for standard currencies, except they are not backed by governmental authority. The market for stablecoins has been growing rapidly.

The Advantages of Digital Money

The current financial infrastructure is very complex and every time money is transferred or changes hands there are costs involved.

  • Digital money eliminates the need for physical storage and safekeeping that is a characteristic of cash-intensive systems. You don’t need to worry about your digital money being stolen or lost (not strictly true)
  • Digital money simplifies accounting and record-keeping for transactions through technology. Therefore, manual accounting and separate entity-specific ledgers are not necessary to maintain records of transactions.
  • Digital money has the potential to revolutionize the payment industry by eliminating intermediaries and further reducing the costs associated with cross-border transfers.
  • Digital money makes it possible to include groups of people who were previously excluded from the economy by not having access to bank accounts. They can use digital money instead.

Digital money is a major innovation in financial technology. It makes payment systems faster and cheaper. But it has the attendant problems of technology, as digital money can be hacked and can erode privacy. While it is still early days for digital money, it will play an important part in the future of finance.

If you have any experiences with these scams do let me know, by email.

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Avoid Cryptocurrency Scams

Digital money (or digital currency) refers to any means of payment that exists in a purely electronic form, such as Bitcoin or the way banks can move money between themselves without there being any physical representation of the currency.

If you already own cryptocurrency, chances are it’s stored in a digital wallet and you have both public and private keys that provide access to it. Scammers try to get you to hand over the private keys – to join their ‘investment’ or to make your currency more secure or to upgrade etc.

Never hand over the private keys as you will be saying goodbye to your currency.

If you don’t have cryptocurrency but are thinking of investing in some, then only deal with well-established reputable businesses – not the ones that appear on social media or in adverts offering something better than everyone else.

Tips to Avoid Cryptocurrency Scams

  • Ignore Cold Callers: They should never be trusted. Cold callers trying to sell cryptocurrency investments are guaranteed to be scammers.
  • Avoid Social Media Adverts: Scammers often use social media to advertise fake cryptocurrency investment opportunities. The ads may look professional and you might think that because they are on Facebook or Twitter then they must be genuine but that’s not the case – anyone, including scammers can advertise almost anything on social media.
  • Too Good To Be True: Cryptocurrency scams often promise to make high returns from your initial investments that are too good to be true. Any company offering get-rich-quick investment opportunities is likely to be fraudulent and if they offer guaranteed returns then it’s definitely a scam.
  • Take Your Time: Scammers typically try to put pressure onto try to force a ‘sale’ e.g.  the offer ends anytime now, or you will be the last person accepted into this plan or something similar condition. Always take your time and do your research before making any decisions.
  • Celebrity Endorsement: A lot of scammers use fake adverts with photos of some celebrity and claim their endorsement, but these are almost always fake and clearly ridiculous. The relevant celebrities often struggle to stop the adverts using their name but the advertiser disappears before they can be found and then re-appears again with the same adverts. Plus, of course most celebrities know nothing of cryptocurrencies.

If you have any experiences with these scams do let me know, by email.

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Bitcoin Mining Steamrollered

Bitcoin is the world’s most popular cyber currency – a currency that only exists in digital form, not in any physical sense.

There is a limited quantity of Bitcoin in the world because the means to create more is a very clever, computing intensive process that gets progressively more difficult to achieve as there are more Bitcoins. In time it will become impossible to create any more Bitcoins.

This protects the value of the Bitcoins already in existence.

Bitcoin mining is the process that allows the creation of new Bitcoins and it involves solving complex mathematical puzzles using vast amounts of computing power and in turn that means using huge amounts of electricity.

One Bitcoin is worth many thousands of dollars, so for those who can, Bitcoin mining can be profitable.

However, to make money at this usually involves using stolen computers and stolen electricity on a huge scale, so it is largely done by criminals using stolen computers running on stolen electricity.

Bitcoin mining is increasingly recognised to be an ecological disaster.

In Malaysia, Bitcoin miners stole $2 million worth of electricity siphoned from Sarawak Energy power lines, so the authorities found the culprits, seized 1,069 bitcoin mining computers, laid them out in a parking lot at police headquarters and used a steamroller to crush them. The video of this went viral.

Six people were charged in relation to the Bitcoin mining.

Good riddance to the criminals and their computers.

If you have any experiences with these scams do let me know, by email.

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Insanely Rich Cryptocurrency Trading

Cryptocurrency scams usually offer riches through buying the currency and the sales pitch is about how many people are Bitcoin millionaires and the supposed continuous rise in value of all cryptocurrencies.

This is lies of course as the price of the various cryptocurrencies rises and falls dramatically and many people have lost large amounts of money. Though it is true that there are many who have made millions from Bitcoins in particular.

This latest scam offers a supposedly risk free way to invest in cryptocurrency , not by buying it but by using a new automated system that invests money for you and makes at least £1,270 per day profit for you, for 20 minutes of work.

That would be great if true, but it’s lies of course.

Currency trading in any form is gambling and there is no guaranteed way to win.

Plus, automated systems are terrible at guessing whether a commodity will rise or fall in value, as so much of the value depends on human judgement of the future.

Guaranteed profits – but only for the scammers.

Never trust a get rich scheme that claims to be 100% successful.

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