You may have heard about them in the news, through one of your favorite online shopping sites, or from a friend who always has the latest scoop on technology trends: cryptocurrencies, like Bitcoin, are a way to buy things online or in person, using a mobile app with sellers who agree to accept them.Cryptocurrencies can be a fast and inexpensive way to pay for goods and services. They arent backed by a government or central bank, and theyre not insured, the way U.S. bank deposits are. They have value because users agree they have value.The value of cryptocurrencies rises and falls sometimes sharply depending on demand. If the value goes down, theres no guarantee that it will rise again.Some payment systems offer legal protections if something goes wrong. For example, the law limits your responsibility for unauthorized use of your credit card to $50. There are no such protections for purchases made with bitcoins.Bitcoin users store their bitcoin addresses in a wallet either on a computer or other data storage device, or through an online wallet service. If you use Bitcoin, encrypt your wallets and back them up. If your Bitcoin wallet files are accidentally deleted, tampered with by a virus, or stolen, your funds could be gone. Or if the company behind your digital wallet fails, or is hacked, you could lose your funds. Thats already happened to some Bitcoin users.Bitcoin users have private and public virtual keys. Its important to secure your private keys, and not share them with anyone. Theyre the only way you can use or transfer your bitcoins.If youre considering Bitcoin mining as way to make money, read up on the FTCs recent case against Butterfly Labs. And if youve had a problem with a bitcoin-related product or service, file a complaint with the FTC.
Nicole Vincent Fleming
Consumer Education Specialist, FTC
Topics: Be Smart OnlineTagged with: mobile, payment, technologySource: www.onguardonline.gov
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