Virtual currencies, such as Bitcoin, have recently become popular and are intended to serve as a type of money. They may be traded on online exchanges for conventional currencies, including the U.S. dollar, or used to purchase goods or services, usually online.
Bitcoin presents unique challenges. The digital-only currency is difficult to trace, it’s international, it isn’t regulated by any central authority and law enforcement has a tough time seizing or freezing those ill-gotten gains.
However, any investment in securities in the United states remains subject to the jurisdiction of the SEC regardless of whether the investment is made in U.s. dollars or a virtual currency. In particular, individuals selling investments are typically subject to federal or state licensing requirements. Check How to avoid Bitcoin Ponzi schemes the investor alert issued by the Securities and Exchange Commission.
Bitcoin users should be aware of the following:
The famous and very true phrase “If it sounds too good to be true, it probably is” avoid deals that sound too good to be true.
Companies accepting Bitcoin as their only payment method. They’re generally either unwilling to disclose account information or don’t have one.
Websites that demand unreasonably fast payment for example Bitcominers rushed people into panic paying within 3 hours to get such a cheap deal.
check the going rate for their product, if it’s way too cheap this should ring alarm bells and warrant further investigation prior to purchase. Start small! If they’re new and untested don’t send your life savings, start with the smallest option to reduce the capital at risk.
Most importantly research before you buy. There are see countless posts on the forums of people finding a thread about a known scam after they’ve purchased.