Protecting Yourself from Cryptocurrency Scams: A Primer

Cryptocurrency is a digital or virtual currency that is secured by cryptography, making it a secure and decentralized form of money. It does not rely on banks or other traditional financial institutions for its trade and does not have a unified regulatory framework. It is instead powered by blockchain technology, a distributed ledger enforced by a disparate network of computers.^[0]

Buying cryptocurrency with fiat currency, such as Great British Pounds (GBP), is relatively straightforward. The main steps include selecting a payment method, making the payment, and then transferring the crypto between your own wallets.^[1] It is important to stay alert to potential fraudsters who are trying to take advantage of people.^[2]

Application-specific integrated circuits (ASICs) are increasingly popular as they are more efficient than graphics processing units (GPUs) and use less energy.^[3] In 2021, ASICs made up more than 43.0% of global revenue and this trend is likely to continue as companies look for ways to mine cryptocurrency that are energy efficient.

Unfortunately, cryptocurrency scams are on the rise, with about 46,000 people reporting they have lost more than $1 billion.^[4] People in Colorado have lost about $25 million to investment scams in 2021, including a couple in Parker who lost about $1.2 million.^[4]

The FBI is actively investigating these crimes and encourages people to be aware of the warning signs. It is important to educate yourself about cryptocurrency, watch out for scams, and protect yourself from becoming a victim.

0. “Yachts Invest partners with Bitcashier to accept Cryptocurrency …” yachtsinvest.com, 5 Feb. 2023, https://yachtsinvest.com/blog/yachts-invest-partners-with-bitcashier-to-accept-cryptocurrency-payments/

1. “Selling Cryptocurrency – Paxful Help Center” paxful.zendesk.com, 5 Feb. 2023, https://paxful.zendesk.com/hc/en-us/articles/360014078533-Selling-Cryptocurrency

2. “Coloradans lose about $25M in cryptocurrency scams, FBI says …” insurancenewsnet.com, 5 Feb. 2023, https://insurancenewsnet.com/oarticle/coloradans-lose-about-25m-in-cryptocurrency-scams-fbi-says

3. “Cryptocurrency: An insider’s guide (free PDF) | TechRepublic” www.techrepublic.com, 5 Feb. 2023, https://www.techrepublic.com/resource-library/whitepapers/cryptocurrency-an-insider-s-guide-free-pdf-copy1/

4. “FBI: More than $1 billion lost in cryptocurrency scams as popularity …” denvergazette.com, 5 Feb. 2023, https://denvergazette.com/news/crime/fbi-more-than-1-billion-lost-in-cryptocurrency-scams-as-popularity-increases/article_5807978c-a32b-11ed-a7f4-c313b881fb62.html