When it was initially launched, Bitcoin was intended as a medium for everyday transactions to enable the purchase of everything from a cup of coffee to a computer or even high-value items such as real estate. Such a concept has not yet materialized and, although the number of institutions accepting cryptocurrencies is increasing, large transactions with them are very rare. Still, it is possible to purchase a wide variety of products on e-commerce websites using cryptocurrencies. These are some examples:
Technology and e-commerce sites:
Many companies that sell technology products accept cryptocurrencies on their websites, such as newegg.com, AT&T, and Microsoft. One of the first online retailers to take Bitcoin was Overstock.com. It is also accepted by Home Depot, Rakuten, and Shopify.
Some luxury retailers accept cryptocurrency as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in exchange for Bitcoin.
Some vehicle dealers (from general brands to luxury dealers) already accept cryptocurrencies as payment.
In April 2021, the Swiss insurance company AXA announced that it would begin accepting Bitcoin as a payment method for all its insurance lines, except for life insurance (due to regulatory issues). Premier Shield Insurance, a US company that sells home and auto insurance policies, also accepts Bitcoin for premium payments.
If you want to spend cryptocurrency at a retailer that doesn’t accept it directly, you can use a cryptocurrency debit card, such as Bitpay in the United States.
Cryptocurrency frauds and scams
Unfortunately, cryptocurrency crime is on the rise. Cryptocurrency scams include the following:
Fake Websites: Fake sites displaying fake testimonials and cryptocurrency jargon promising guaranteed big returns as long as you keep investing.
Virtual Ponzi Schemes: Cryptocurrency criminals promote non-existent opportunities to invest in digital currencies and create the illusion of great returns by paying old investors with the money of new investors. One scam operation, BitClub Network, racked up more than $700 million before its perpetrators were convicted in December 2019 .
“Celebrity” endorsements: Scammers pretend online to be billionaires or famous people who promise to multiply your investment in a virtual currency, but instead steal what you sent. They may also use messaging apps or chat rooms to start rumors that a famous entrepreneur is endorsing a specific cryptocurrency. Once they have encouraged investors to buy and increased the price, the scammers sell their investment, reducing the value of the currency.
Romance Scams: The FBI has warned of a trend in online dating scams , in which scammers persuade people they meet on dating apps or social media to invest or trade in virtual currencies. The FBI’s Internet Crime Complaint Center recorded more than 1,800 reports of cryptocurrency-focused romance scams in the first 7 months of 2021, with losses approaching $133 million.
Alternatively, scammers can pretend to be legitimate virtual currency traders or set up fake exchanges to trick people into giving them money. Another cryptocurrency scam involves fraudulent sales strategies for cryptocurrency individual retirement accounts. Then, there is direct cryptocurrency hacking, in which criminals break into the digital wallets in which people store their virtual money to steal it.
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Are cryptocurrencies safe?
Cryptocurrencies are typically created using blockchain technology. A blockchain describes how transactions are recorded in “blocks” and given a timestamp. It’s a somewhat complex and technical process, but the result is a digital ledger of cryptocurrency transactions, which is difficult for hackers to manipulate.
Additionally, transactions require a two-factor authentication process. For example, you may be asked to enter a username and password to initiate a transaction. Next, you may need to enter an authentication code that is sent in a text message to your personal cell phone.
The implementation of security measures does not preclude the possibility of cryptocurrency hacking. Several hacks for large sums have severely damaged cryptocurrency startups. Coincheck and BitGrail were attacked by hackers, who took away USD 534 million and USD 195 million respectively.
This can cause brutal swings that can result in big profits for investors or big losses. Additionally, cryptocurrency investments are subject to far fewer regulatory protections than traditional financial products such as bonds, stocks, and mutual funds.
Four tips for investing safely in cryptocurrencies
According to Consumer Reports, all investments carry risks; However, some experts consider cryptocurrencies to be one of the riskiest investment options out there. If you want to invest in cryptocurrencies, these tips can help you make informed decisions.
Research the bags:
Before investing, find out about cryptocurrency exchanges.It is estimated that there are over 500 different bags available. Do your research, read reviews, and talk to more experienced investors before proceeding.
Learn how to store your digital money:
If you buy cryptocurrency, you must store it. You can keep them in a bag or digital wallet. Although there are different types of wallets, each has its benefits, technical requirements and security levels. Just like bags, you should research your storage options before investing.
Diversify your investments:
Diversification is key to any good investment strategy; This is still valid if you invest in cryptocurrencies. For example, don’t invest all of your money in Bitcoin just because you are familiar with the brand. There are thousands of options and it is better that you diversify your investment in several currencies.
Prepare for volatility:
The cryptocurrency market is very volatile, so you should be prepared for ups and downs. You will see drastic changes in prices. If your investment portfolio or mental health can’t handle it, cryptocurrencies may not be a wise choice for you.
Guest article written by: Boopathi Krishnan is an executive of Marketing at Nft Marketplace Development. With 1+ years of experience in SEO and marketing, he loves talking about Blockchain, SEO, and NFTs.