This article discusses important details about bitcoin since it is the most valuable and most popular cryptocurrency. Bitcoin is the first digital coin that was created and it was created in 2008. Apart from its value, other qualities that made it popular are its transactional properties that have been outlined below.
Bitcoin Transactional properties
A. Irreversibility
Once a bitcoin transaction is confirmed, it can’t be reversed. You can’t reverse it and the other party can’t reverse it either. Not even Satoshi can reverse it. That is a high level of integrity. However, there is another side to it. If you mistakenly send money to a wrong bitcoin account, you cannot reverse it. The money is gone for good. Bitcoin transactions do not have safety net.
B. Pseudonymity
Bank accounts can be traced to their owners. If you deposit some money into a particular bank account, the transaction can be traced to you, the depositor and the owner of the account. Bitcoin does not work like that. Every bitcoin address is temporary. Bitcoin generates an address for transaction. So, the transactions cannot be traced to real humans. This is why bitcoins are usually used for scams. Once you deposit some money into a scammer’s account you can’t reverse the transaction and you can’t track the scammer down either.
High transaction speed
Bitcoin transactions are super fast. When you send some funds to anyone on the platform, the person will receive it almost instantly. This is better than what banks currently offer. If you make an international money transfer through banks, it will take three business days before the other party receives it. It is even worse when you send it on a Friday. The person will receive it on Wednesday because Saturday and Sunday are not business days. The same thing will happen if there is a public holiday among the three business days. It will extend your waiting period. The worst part is that you will have to pay a huge commission for the super-slow service.
Due to the advent of bitcoin and blockchain technology, the number of money transfers done through banks has begun to dwindle and banks are making preparations to adopt blockchain, the technology used by bitcoin.
Security
Every bitcoin account runs on a public key cryptography system and only the owner can send cryptocurrency. The fact that the keys are locked in 30-character chain makes it even more secure. It is almost impossible to break the scheme. A bitcoin address is super-secure.
Total freedom
Everybody is free to use the scheme. You don’t have to seek anyone’s consent to download and install the software. It has no gatekeeper.
That being said, it is also necessary to inform you that due to the fact that bitcoin offers irreversibility and pseudonymity, it is fraught with different types of scams. So, here are some of the scams you should look out for when you transact business with bitcoin.
Common bitcoin scams
1. Ponzi scams
Actually, ponzi schemes have been existing before the advent of bitcoin. It is now being carried out more with bitcoin because of the platform’s pseudonymity and irreversibility. It is a high yield scheme in which the returns of the first batch of investors are paid with the investment of the second batch of investors. No matter how hard the organizers try, ponzi schemes will always end because they have no physical products that they offer. So, stay away from ponzi scams. The fact that it is run on bitcoin does not make it any different from other ponzi schemes and the fact that your friends were lucky enough to get their returns does not mean it will go on like that. The scheme may crash on you leaving you high and dry.
Before transferring bitcoin into any account for any reason, it is always a great idea to do your due diligence. Remember, bitcoin transactions cannot be reversed!
2. Mining scams
Some companies will promise to mine an outrageous amount of bitcoin for a token. When you send the “tokem” to them, that will be the end of it. You won’t hear from them again and neither will you get any bitcoin. The truth is, if they really know how to mine such an amount of money, they won’t need you. Nobody likes to share his profit with others. If the deal sounds too good to be true, it probably is. Watch out.
3. Exchange scams
This is another common scam. The scammers offer to exchange your bitcoin at higher rate than what others offer. Once you send the amount to be exchanged to them, that will be the end f it. You won’t be able to reverse the transfer and you won’t be able to track them. Once a bitcoin exchanger offers a rate much higher than average rates, you should be wary. Don’t be taken in by fake reviews. Secondly, there are several platforms that review global currency exchangers. You can consult any of them.
4. Wallet scams
There are several genuine online bitcoin wallets but there are fake ones too. The scammers will pretend to offer an online wallet where you can save your bitcoin temporarily. Once you send your money to them, it will be gone. They are so smart that you will continue to see the money. The day you decide to withdraw some of your money is the day that the truth will hit you. They will not respond. That is the day you will find out that all the information on the site are false.
5. Trading scams
This scam involves people telling you to invest your bitcoin with them. They will tell you how long they have been trading bitcoin without a single loss. Some of them will even give you a fixed percentage of return. You will be so impressed. Once you deposit your money, you won’t hear from them again. However, it is necessary to make it clear that there are genuine companies trading bitcoins too. You only need to apply caution.
Melissa Crooks is Content Writer who writes for Hyperlink InfoSystem, a mobile app development company in New York, USA and India that holds the best team of skilled and expert app developers. She is a versatile tech writer and loves exploring latest technology trends, entrepreneur and startup column. She also writes for top app development companies.
