Scammers like to demand electronic forms of payment. Most common requests are for gift cards, money orders, E-Transfers and cryptocurrency. These forms of payment are usually used because they require no in person interaction, are difficult to trace back to the scammer, and can be accessed from around the world. These transfer methods make it difficult for police to trace the suspect.
Since cryptocurrency is a relatively new and complex asset, but its popularity is growing, we want to provide a brief explanation about its most common form, Bitcoin, to help citizens understand why they should be skeptical if someone, especially someone claiming to be from a government, authority, or financial institution is allegedly asking you to pay them with it.
It’s important for citizens to know that there are nearly 9000 virtual assets (cryptocurrencies) that exist. The most popular names used in the public and by fraudsters are Bitcoin, Ether, Tether, and Litecoin.
What is Bitcoin?
Bitcoin is one of many cryptocurrencies, but the name is fooling. It’s not an actual currency like the Canadian Dollar (it is not centrally controlled by any entity). Instead, Bitcoin is a commodity that can be purchased and sold using other currencies, similar to purchasing a bar of Silver.
Bitcoin’s worth constantly changes, like investing in a bar of Silver. At this point, one Bitcoin is worth tens of thousands of dollars, but it could plummet at any time.
Every single Bitcoin transaction is also publicly available, which is stored on a ledger called the blockchain. However, transactions are also designed to promote the anonymity of the Bitcoin user.
Why do people use it?
- Fees are usually upon deposit and withdrawal.
- There is no third-party (a bank) that you have to pay typical banking fees to store your funds.
- It is a simple person-to-person transaction; however, each person remains anonymous.
- Because its value fluctuates, people see Bitcoin as an investment. It’s risky but could pay out.
Why is it used in scams?
Although it is reported that most bitcoin transactions (98.9%) are not associated to criminal activity, the birth of cryptocurrency has provided individuals with new mediums to facilitate criminal activity.As a digital currency, there is no way to track or identify who is sending or receiving Bitcoin. This is a perfect way for a scammer to receive a lot of money with no way of tracing it back to them.
Bitcoin involves no face-to-face contact with a bank teller or cashier; instead, money is placed into a machine like an ATM. Scammers are constantly trying to limit a complainant’s interactions with others to avoid the chance of someone warning the person that they are falling victim to a scam.
Top scams with Bitcoin/cryptocurrency as the means of payment include:
• Government impersonation – most prominent of all related scams
• Employment
• Romance
• Fraudulent Sale or Purchase
• Business Impersonation
• Family Emergency
• Investment
• Rental Property
• Extortion/Ransomware
Can you catch the scammer and get my money back?
With cryptocurrency, we can track where the money goes, but we can’t stop or reverse the transaction of cryptocurrency (unlike some banking where the bank can put a hold on the transfer), so unfortunately it is quite rare for your funds to be returned.
The identity of the owner of the scammer’s cryptocurrency account is not easy to identify either, however, we have been successful in many cases. The difficult part is that these scammers are generally located outside of Canada and thus we must engage with external agencies to assist in an investigation.
Should you be suspicious if someone asks for payment in Bitcoin?
Bitcoin is not a commonly recognized currency, and most citizens don’t understand it, so why would someone ask for payment in it? No government, authority, financial institution, or reputable business will ask you to send Bitcoin. If you don’t understand it, you shouldn’t be paying with it!
We encourage citizens to learn more about cryptocurrency investment scams here.
FAQs
Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network. New Bitcoins are created as part of the mining process, as a reward to people whose computer systems help validate transactions. Buying Bitcoin exposes you to a volatile asset class.
What is the simplest explanation of Bitcoin? ›
Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. Bitcoin's creator, Satoshi Nakamoto, originally described the need for “an electronic payment system based on cryptographic proof instead of trust.”
How much is $1 Bitcoin in US dollars? ›
Conversion tables
The current value of 1 BTC is $70,220.06 USD.
What will $1000 of Bitcoin be worth in 2030? ›
If Wood is correct and Bitcoin does reach $3.8 million by 2030, an investment of $1,000 would be worth over $60,000. This would result in a compound annual growth rate (CAGR) of over 100%. Read Next: Bitcoin has jumped another 45% already this year – how much would you need to get started today?
Is Bitcoin real money? ›
Bitcoin (BTC) is a cryptocurrency (a virtual currency) designed to act as money and a form of payment outside the control of any one person, group, or entity. This removes the need for trusted third-party involvement (e.g., a mint or bank) in financial transactions.
How many people own 1 Bitcoin? ›
However, some estimates can be made based on blockchain data and surveys of Bitcoin holders. According to data from Bitinfocharts, as of March 2023, there are approximately 827,000 addresses that hold 1 bitcoin or more, representing around 4.5% of all addresses on the Bitcoin network.
What happens if you invest $100 in Bitcoin today? ›
Investing $100 in Bitcoin alone is not likely to make you wealthy. The price of Bitcoin is highly volatile and can fluctuate significantly in short periods. While it is possible to see significant returns in a short time, it is also possible to lose a substantial amount just as quickly.
How do you explain Bitcoin to a child? ›
You can start by explaining to them that Bitcoin is a type of currency that exists only online. That means, unlike US dollar bills you'd get for your weekly allowance, there are no physical bills or coins associated with Bitcoin. It's 100% digital.
How do you explain Bitcoin to a dummy? ›
Bitcoin (BTC) is a form of digital money. It exists on its own network that facilitates secure, online transactions directly between accounts without requiring an intermediary — such as a bank or credit card company — to mediate and validate transactions.
Can you cash out Bitcoin? ›
One of the easiest ways to cash out your cryptocurrency or Bitcoin is to use a centralized exchange such as Coinbase. Coinbase has an easy-to-use “buy/sell” button and you can choose which cryptocurrency you want to sell and the amount.
The current 100 USD to BTC exchange rate is 0.001444 BTC and has decreased by -9.17% over the past 30 days. The USD to BTC price chart indicates the historical change of 100 USD in BTC over the past 30 days.
How much is $500 Bitcoin in US dollars? ›
Is it smart to invest in Bitcoin? ›
Sarathy concurs that there are risks involved with investing in these cryptocurrencies, including price volatility, cybersecurity concerns and a lack of regulations compared to traditional currency. Ultimately, it's up to each individual user how much risk they want to take.
Is Bitcoin a buy right now? ›
Investor takeaway
For that reason, while current market conditions are favorable for anyone considering buying Bitcoin, it is an asset you should purchase only at your own risk. Because while Bitcoin may have the potential for significant returns, you may also lose most of your investment.
Is Bitcoin going to skyrocket? ›
Our most recent Bitcoin price forecast indicates that its value will increase by 10.26% and reach $77,148 by June 06, 2024. Our technical indicators signal about the Bullish Bullish 97% market sentiment on Bitcoin, while the Fear & Greed Index is displaying a score of 73 (Greed).
What is Bitcoin and how did it work? ›
Each Bitcoin is basically a computer file which is stored in a 'digital wallet' app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain.
Is Bitcoin a good investment? ›
Investor takeaway
For that reason, while current market conditions are favorable for anyone considering buying Bitcoin, it is an asset you should purchase only at your own risk. Because while Bitcoin may have the potential for significant returns, you may also lose most of your investment.
How much does a Bitcoin cost? ›
Bitcoin's price today is US$70,763.43, with a 24-hour trading volume of $25 B. BTC is -0.10% in the last 24 hours. It is currently -1.60% from its 7-day all-time high of $71,915.49, and 5.30% from its 7-day all-time low of $67,200.51. BTC has a circulating supply of 19.71 M BTC and a max supply of 21 M BTC.
How do you make money on Bitcoin? ›
Bitcoin trading involves buying and selling Bitcoin via an exchange platform with the goal of earning profit, which may or may not be invested in additional crypto holdings. Strategies run the gamut from intra-day trading, to buy and hold, to hedging.
