Cryptocurrency is vulnerable to attacks, and experts advise that research be done before investing, or before responding to what could be email fraud.
Individuals have reported receiving threatening emails, that begin by stating, “I know you have a habit in indulging in adult content… and let me enlighten you on how vulnerable you truly are.”
The emailer/blackmailer stipulates an amount to pay in bitcoin within a certain period of time, “or face the consequences.”
An article titled, “Cryptocurrency Investment Fraud,” on FBI.com, reports on another fraudulent activity, commonly described as “pig butchering,” and is one of the most prevalent and damaging fraud schemes.
“Scammers, through various means of manipulation, convince victims to deposit more and more money into financial ‘investments’ using cryptocurrency,” states the article.
“In truth, these investments are fake; all victim money is under the control of – and ultimately stolen by – criminal actors, usually overseas. As a result, victims typically lose all money they invested.”
Robert Moruzzi has been investing and researching cryptocurrency since about 2017, and said it is prudent to thoroughly research before investing.
“It is all too common for someone to get on a hype train for a stock or crypto without a belief system, aka an investment thesis,” Moruzzi said.
None of what Moruzzi shares with TDP should be considered investment advise and all investing carries some level of risk, he said.
“I believe Bitcoin to be the best crypto investment,” Moruzzi said. “It has the longest track record and was not issued by a central party like a corporation.”
Bitcoin was released as free open-source software by an anonymous creator with the pseudonym Satoshi Nakamoto, Moruzzi said.
“There are other interesting coins that, unlike Bitcoin, do not use computers to mine, known as Proof of Work, but instead use staking coins – essentially locking them up online – to mine,” Moruzzi said. “This is known as Proof of Stake.”
He said more coins can be accumulated by holding coins, kind of like interest or a dividend.
“Solana is one of the most popular proof of stake coins. Ethereum is one of the oldest coins that use this type of ‘mining,’” Moruzzi said. “These coins are also popular because they enable things like meme coins, art work on the blockchain, and decentralized finance opportunities, which each have very interesting use cases.”
Moruzzi said an investor can start with less than $1, and one of his favorite Bitcoin only exchanges, Strike.me, will let a person buy as little as 25 cents at a time, and schedule that to happen automatically up to every hour.
An ATM machine can be used to purchase cryptocurrency, and at least two are now installed in local businesses. One is at Cherokee Inn and one at Pinky’s Smoke Shop and Apparel. A representative of Unbank, the owner of the ATMs, said an app can be downloaded to use in conjunction with the machine. A person has to have a “wallet” to transfer back and forth from.
“Our platform makes it possible to buy and sell Bitcoin and other cryptocurrencies at a supermarket, convenience store, gas station or any of our supported locations in the U.S.,” states the bank’s website.
Moruzzi said most people hold the coins longterm, just like stocks, gold, real estate or fine art.
“Speculation and trade is a big part of crypto activities today,” Moruzzi said. “More recently, there is a belief system growing, that Bitcoin is a pristine asset that serves as pristine collateral, and companies are starting to issue loans backed by Bitcoin, just like a mortgage is backed by the house one is buying.”
Most loans are secured by some form of collateral, and holding Bitcoin could be the best collateral since it cannot be duplicated or increased at will, Moruzzi said.
“The issuance is locked into the code so just because demand goes up, we cannot create more, unlike houses or gold that can be further mined,” Moruzzi said.
A woman in California, Maile Rietow, reported to TDP that she lost several thousand dollars to a fraudster through a direct call, but before her account was depleted she used her cryptocurrency to pay for major dental work. TDP asked Moruzzi how a person pays for these kinds of services with cryptocurrency.
“My first assumption was they would have needed to sell their coins and transfer the cash back into a bank account to pay the dentist,” Moruzzi said. “There are, however, some vendors that do accept cryptocurrency as payment. In this case, the dentist would need a wallet.”
The customer would use their own wallet to send the crypto to the business wallet, Moruzzi said.
Most exchanges also function as wallets, giving traders an address to send Bitcoin from and receive to, Moruzzi said.
When using a hardware wallet, it is essential to keep a seed phrase ultra secure, Moruzzi said.
“A seed phrase is a 12- to 24-word passcode to access your Bitcoin wallet anywhere with an internet connection, Moruzzi said. “A lot of people will buy steel plates created to store these words on for water and fire protection.”
If anyone gets these words they can steal a person’s funds, Moruzzi said.
“A huge value here is that you can store this seed phrase in your head and go anywhere in the world and still have access to your funds without anyone knowing,” Moruzzi said. “This isn’t a big deal to most Americans, but I can only imagine it has allowed countless people to flee terrible situations and/or hostile nations with at least some of their family wealth.”
Moruzzi said the best way to gauge risk is based on reputation and longevity of the exchange.
President Donald J. Trump has his own currency called Trump coin, what the crypto community would refer to as a “meme coin,” Moruzzi said.
“Meme coins derive their value primarily from viral internet narratives, just like those cat videos or dance videos that everyone has seen,” Moruzzi said.
Meme coins, like the Trump coin, can and have made some people a lot of money, but Moruzzi considers this to be more like a lottery ticket than an investment, “as it is rare for most people to make money with meme coins.”
