Crypto Currency

Bitcoin and the hundreds of other cryptocurrencies that followed it are digital currencies that exist outside any single bank or government. They're built on open-source, decentralized ledger technology (the "blockchain") and can be used to move money without a bank as the middleman.

Two reasons people care about crypto: as a way to transact with some degree of privacy, and as a speculative investment. Both come with real risk.

It's not as anonymous as people think.

Despite the reputation, most cryptocurrency transactions ARE traceable - blockchains are public ledgers, and law enforcement and researchers have gotten quite good at following the money. It remains a popular tool for ransomware and scam payments specifically because victims believe it can't be traced, not because it actually can't.

The value is genuinely unpredictable.

Cryptocurrency prices are extremely volatile and have wiped out large amounts of money for ordinary investors, sometimes in a matter of days. Coins and exchanges also come and go - some have collapsed entirely, taking user funds with them. There is no FDIC-style protection and often no recourse if an exchange fails or you're the target of a scam.

If you choose to use or hold cryptocurrency:

• Only put in what you could afford to lose completely.
• Use a well-established, reputable exchange, and understand the difference between funds held on an exchange versus in your own wallet.
• Be extremely skeptical of anyone contacting you asking to be paid in crypto - that's a major scam pattern (see our Scams article).
• Understand that "anonymous" is not the same as "untraceable."
• Keep an eye on the news regarding crypto, as you may find reports that expose more risks for certain platforms.

Notes:

With an app, many local retailers are starting to accept Bitcoin payments just as they do credit cards. eCommerce web sites are also accepting such payments. There is even an option on Craigs List to advise buyers if you will take crypto currency.