Concept and features of electronic currency.
Cryptocurrency is an electronic type of money. They are not issued in the form of banknotes or coins and do not have a single center that issues them (by analogy with the central bank of the state). Forgery protection is carried out using cryptographic encryption.
There are several differences between traditional money and cryptocurrency:
- Rubles, dollars or other common units (they are also called fiat money) are issued in the form of banknotes with different denominations. For non-cash payments, they need to be deposited into an electronic account. Bitcoin Scams and other virtual money are generated immediately electronically.
- The release of virtual units occurs by generating mathematical code.
- The emission of fiat currencies is carried out by the central banks of the countries. Any Internet user can issue digital money.
Payments in both cases have the same mechanisms. There are special exchanges where you can transfer digital finance into ordinary ones.
The circulation among users occurs through the blockchain system – “closed chain”. That is, a single database has been created, divided over a large number of PCs. Information is recorded simultaneously on all media, which makes the system transparent.
One of the most popular ways to exchange digital coins for rubles is through exchangers. Traders transfer currencies to the service, which sends currency in return, for example, to a bank card or electronic wallet.
As a rule, scammers do this in order to gain time and try to deceive other traders before the scheme is widely publicized. If your funds for some reason were not paid by the exchanger, you should immediately clarify the reason with the technical support. If the answer is suspicious, you should tell about it on special forums, spread the story in the community. You cannot do this, but you may save other market participants from using this service.
In order not to lose your savings on fraudulent services, first of all, study user reviews. Perhaps someone has already encountered delays or non-payments. If so, it is better to refuse the services of the exchanger.
In this case, you should not pay attention to the same type of positive comments. Perhaps the service itself spoke flatteringly about its services in order to build a good reputation.
Crypto Fraud: The 21st Century Pyramid
Financial fraud involving cryptocurrencies is at an all-time high thanks to growing interest in them, according to the Federal Trade Commission – and the line between failure and a Ponzi-style cryptocurrency scheme is blurring. The cases of OneCoin and PayCoin eloquently speak about this LetsExchange.
OneCoin was launched in the mid-2010s and has been billed as an educational cryptocurrency trading service. It turns out that the OneCoin tokens being bought by investors weren’t actually on the blockchain. The developers were accused of organizing a banal Ponzi scheme (financial pyramid), but they have already managed to steal $ 4 billion. Experts call this scam one of the largest in history. By the way, one of the founders of the pseudo-cryptocurrency, the Bulgarian entrepreneur Ruja Ignatova, has not yet been found.
In 2019, the founder of PayCoin, Homer Joshua Garza, was sentenced to 21 months in prison and a multiple-zero pecuniary damage payment. He turned a scam: he created a cryptocurrency and offered investors to invest in it, guaranteeing them that he had a reserve capital of $ 100 million. Of course, he did not have any reserve, and it all ended with investors losing $ 9 million.