Wikipedia defines cryptocurrency, as ‘a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.’
How does crypto work? Unlike stocks and bonds, governments do not regulate cryptocurrencies. What’s unique about crypto is that peer-run systems generate it. They employ encryption to ensure (varying degrees of) anonymity and security. Moreover, they design individual to gradually reach a maximum amount over a pre-set time period. Once that time period is up, generation will cease. It was that built-in deadline that encouraged a rush by investors.
As a result, the entire virtual currency market reached a capitalisation of nearly $2 trillion dollars in just 12 years. Within five years from mid-2013, the complete market cap for all cryptocurrencies grew by a whopping 10,000%.
Since bitcoin was introduced in 2009, for example, its value increased at one point by over 25,000%. In 2000 it quadrupled in value. By 2021 the cost of a single bitcoin reached $50,000.
The Cambridge Centre for Alternative Finance issued the world’s first global cryptocurrency benchmark study in May 2017. It found that more than three million people worldwide were then actively using digital currencies. They used it as an alternative to acquire everything from goods and services, and to participate in gambling platforms known as ‘cryptocurrency lottos.’ That figure was three-times higher than previous estimates. It proved that there was a critical mass that turned cryptocurrency investments into an integral part of the global financial system virtually overnight.
But you cannot get money back from bitcoin. There is no central bitcoin organisation that administers it. Cryptocurrency is virtual. There is no way to cancel a blockchain transaction once you click. Can you chargeback bitcoin? No, there is no such thing as a bitcoin chargeback, no such things as a cryptocurrency chargeback. So can you ever recover scammed bitcoin? Yes, but that requires determination, patience and most importantly, intensive research. That’s where MyChargeBack can help.
A number of other virtual currencies came onto the market following the advent of bitcoin. In the terminology of the trade, they underwent a cryptocurrency ICO (initial coin offering). These include Litecoin, introduced in 2011, and Ethereum, introduced in 2015.
Bitcoin alternatives like these, among many others, now attract attention from people interested in cryptocurrency investments. Especially if they are seeking to enter the market at a lower entry price. Within one year, therefore, bitcoin’s share of the market fell from 90% to 40%.
Say you want to open up a bitcoin account. Cryptocurrency consultants are usually the first stop for someone looking to make his or her first crypto investment. The challenge, however, is that cryptocurrencies are, by definition, free from government regulation. Therefore, there are no licences for cryptocurrency consultants. To weed out the scammers, check to see if they have professional histories. Look for a background in finance, as investment consultants, stockbrokers, commodity traders, or some other related field that actually does require government registration. And then confirm that their licences remain valid before you sit down with them.
As is the case with traditional scams, fraudulent cryptocurrency consultants and fraudulent cryptocurrency trading sites generally disguise their addresses by renting out a mail drop in an unusual location for international commerce. That address usually turns out to be on some remote and underpopulated island. Or in a remote and underpopulated country behind what was once the Iron Curtain. Due to demographic factors, such countries usually lack the governmental infrastructure to effectively monitor brokerages and other financial services. Complementing that is lax enforcement of whatever legislation does exist. And a legal system that has no experience in cryptocurrency investments and prosecuting online scams.
The first step to buying cryptocurrency is to find an exchange. But the selection of an exchange for investing in cryptocurrency poses unique risks. This is because even if a cryptocurrency exchange claims it is incorporated in a large Western country, it will not be registered with the national financial oversight agency. Again, that is because cryptocurrency is, by definition, free from government control and supervision.
Financial regulation is the most important aspect of a brokerage’s credibility. Without it there is no government oversight. Which means the brokerage is unregistered and unmonitored. This is typical of all scam brokerages. If the cryptocurrency exchange also trades other commodities, check with the appropriate national financial oversight agency that has a valid licence to do so. In the event that it does, it has everything to lose if it is engaging in a cryptocurrency scam. If it doesn’t, that’s a red flag. Stay away.
Investors can trade cryptocurrency like any other asset. Today’s bitcoin rate should appear on an exchange’s website. You shouldn’t have to ask an exchange ‘What’s the price of bitcoin?’ The exchange’s professional charges should also be listed. If they aren’t, that’s a red light. If the site intentionally hides its crypto trading costs from the public, that probably means they are either unnaturally high, linked to the size of the investment or even arbitrary − which, of course, enables the cryptocurrency scam to maximise the rip-off. Keep in mind, there is no such thing as a cryptocurrency chargeback, so don’t rush into it before you do your homework.