The Dangers of Virtual Currencies
As a form of money that’s encrypted, virtual, tradable, and independent of a central bank, virtual currencies have been all the rage over the last few years.
But did you know virtual currency is just as vulnerable to hackers as your smartphone? Or worse yet, that unlike your phone, the technology is still unproven?
How about the fact that issuers aren’t even legally required to publish a track record that shows investors they’re a financially sound company?
What makes virtual currencies like bitcoin and Ethereum so dangerous is not just the riskiness of investing in something so volatile, but the fact that this new form of currency is still unregulated.
As a result, fake exchanges exist for the sole purpose of taking real money away from potential investors like you.
But it goes deeper. With the recent rise in the value of virtual currencies, more and more cyber thieves are using malware to capture users’ exchange login credentials, thereby granting them access to their crypto wallet and their credit card.
So if someone were to obtain your login information through, say a phishing email, this would allow them to access the cryptocurrency exchange, and steal both your currency and your credit card information.
And the worst part is… there’s nothing you can do about it.
With virtual currency, there’s no such thing as an anti-fraud guarantee, or a centralized power that can reverse fraudulent transactions. Furthermore, while blockchain technology can show you which computer stole your money, it’s impossible to identify or even prosecute the hacker who did it.
It’s no wonder why banks like JPMorgan Chase, Bank of America, and Citigroup have recently banned crypto purchases altogether. The increases in fraudulent transactions—combined with cardholders’ inability to pay off large purchases following a drastic fall—just isn’t worth the risk to them.
So why would it be worth the risk to you?
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