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.

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.

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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Bitcoin attracts a huge number of scammers offering guaranteed returns, fake accounts, Bitcoin machines, AI based investments etc. As with many scams, they try to tap into people’s greed.

Common Bitcoin Scams

1. Social Media

Scammers create fake social media accounts and use them to entice people to fall for various scams or sometimes they buy stolen social media accounts and invite everyone on the real owners contact list to click a link to something supposedly wonderful or funny etc. but it links to a scam site.

This is most commonly on Twitter but also occurs on the other social media networks.

2. Fake Currency Exchanges

The scammers offer membership of a supposed cybercurrency exchange where you can buy and sell Bitcoins and other cyber currencies at low margins.

Never sign up for an account without being sure it is real. Some of these scammers setup what appears to be an exchange but it’s not.

3. Fake Currency Wallets

You can store your cyber currency in digital wallets and some scammers have created fake wallets. Some have even created USB keys branded to look like a digital wallet but loaded with malware to steal yaccess top your cyber currency which the criminals can then steal.

4. Fake APPS

Scammers have created all sorts of fake APPS related to cyber currencies and some even managed to get them available on the Google and APPLE stores.

5. Celebrity Giveaways

The scammers impersonate a celebrity and announce that they’re giving away a lot of cryptocurrency for free, as long as you send them some cryptocurrency first.

The scammers will often promise to send back double what you send them. Although especially prominent on Twitter, this scam has also appeared on platforms including YouTube, where scammers will impersonate a celebrity in a video or livestream.

6. Fake Initial Coin Offerings (ICO)

These are the cyber currency equivalent of new company offerings of shares. What better than convince people there is a new cyber currency coming to market and they must get a share of the no doubt enormous gains to be made as happened in the early days of Bitcoin. Many of these fake offerings are made to sound very similar to Bitcoin.

7. Bitcoin Mining

The process of creating new Bitcoins is called Bitcoin mining and it’s a process that requires vast amounts of computing power. Some scammers offer to let you on a deal with Bitcoin mining setups. These are always a bad idea as most mining nowadays is carried out by criminals.

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