Bitcoin Fraud – What is it and How Do I Protect it from Fraud?
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Bitcoin is the original cryptocurrency — a decentralized electronic payment system designed to eliminate the need for middlemen and allow bitcoin 3800 to exchange money quickly, easily, and independently over the internet. In just a few years, Bitcoin and similar cryptocurrencies have steadily grown in popularity and substantially increased in value. If you are considering owning Bitcoin bitcoin 3800 any other cryptocurrency, it is critical to have an understanding of how bitcoin 3800 currencies work so bitcoin 3800 can protect yourself and bitcoin 3800 investment.
Bitcoin is made up of two core components: Blockchain is a publicly shared paper trail that records all Bitcoin activity and transactions. The blockchain is one of the biggest strengths of cryptocurrencies, as all transaction bitcoin 3800 is bitcoin 3800, shared, and validated between all Bitcoin users using this publicly available ledger.
Whenever a Bitcoin is moved from one person to another, this transaction is permanently recorded in the blockchain: The second core component of Bitcoin is called a bitcoin 3800, which is essentially a Bitcoin bank account. It consists of a pair of keys: The primary way fraudsters attack Bitcoin users is by obtaining private key information for wallets and using it to access and steal their balances. All transactions made with Bitcoin are permanent and essentially anonymous; once fraudsters access your wallet and steal your funds, there is no risk for them to be tracked and no recourse for you to get your Bitcoins back.
Wallets stored in the cloud or on your computer are vulnerable to hackers as they are often secured with a simple password. If your computer or password is compromised, so are your Bitcoins. Another common Bitcoin fraud focuses on major Bitcoin exchanges and websites. There are a large variety of websites that offer a one-stop-shop to buy and trade Bitcoin via online wallets. Users can purchase Bitcoin with money on an exchange, hold it in online wallets operated by the exchange, and easily sell or bitcoin 3800 it for other cryptocurrencies through the exchange.
When you hold Bitcoin balances on one of these websites, you essentially hold an IOU — the website still controls the private key information and therefore is the holder of the Bitcoin assets. Although these exchanges are convenient and an easy way to get into Bitcoin, they are major targets for fraudsters.
A hacker who is able to compromise an exchange will have access to bitcoin 3800 the private keys and Bitcoins held within, taking massive amounts of Bitcoins for themselves and leaving wallets empty. With over a million Bitcoins stolen from exchanges sincethey are a clear and common target for hackers. When purchasing Bitcoins and trading them through an online exchange, it is a good practice to diversify where you store your Bitcoins across multiple wallets.
Just as it is a risk to hold all your assets with a single bank or investment, it is risk to hold all your Bitcoins within a single wallet. If you plan on holding onto your Bitcoin for a long period of time, transfer them bitcoin 3800 a wallet which you fully control. Bitcoin and other cryptocurrencies are new and exciting technologies for enthusiasts, investors, and fraudsters alike.
Before investing in any cryptocurrency, take the time to learn how each system works and best practices for buying, storing, and selling these virtual assets. Bitcoin Basics If you are considering owning Bitcoin or any other cryptocurrency, it is critical to have an understanding of how these bitcoin 3800 work so you can protect yourself and your bitcoin 3800.
Common Bitcoin Fraud The primary way fraudsters attack Bitcoin users is by obtaining private key information for wallets and using it to access and steal their balances. Protect Yourself When purchasing Bitcoins and trading them through an online exchange, it is a good practice to diversify where bitcoin 3800 store your Bitcoins across multiple wallets.
Make sure you understand the different wallet types available and choose one which is secure and will protect your private key information. Be wary of holding all your Bitcoin on exchanges; Bitcoin held on an exchange is not under your control and is at risk to hacks bitcoin 3800 data breaches. Bitcoins are the original but far from the only cryptocurrency. This is a speculative investment with incredible volatility bitcoin 3800 an ever-growing number of competitors and alternatives.
Laura Shank Marketing Director
