Bitcoin and blockchain a scam this is why you should care
Unfortunately, fraudsters love to jump on emerging trends, including blockchain technology, and aggressively target consumers with a variety of scams. Some basic information about blockchain can help you recognize and avoid investment schemes that might reference blockchain technology in an attempt to lure you into sending money.
Blockchain, also known as distributed ledger technology, functions through the participation of multiple individuals. Each "block" in a chain is comprised of a series of records secured by cryptography that describe preceding and current transaction data. Blockchain technology is viewed as an attractive alternative to records maintained on a central database. This is because risk and management are shared among a number of different users, who are known as "nodes. This allows all parties on the network to have access to a shared, identical, irreversible ledger of transactions.
In other words, each node participates in the administration of the blockchain, including the verification of new additions to the blockchain.
Each node also is capable of entering new data into the database. To add new information to the blockchain, the majority of nodes must reach consensus, which enforces the network's security. Blockchain technology was originally engineered to prevent fraud during the exchange and payment of virtual currencies, such as Bitcoin.
For example, because there is a permanent record of a transaction on blockchain, the technology prevents a user from duplicating or double-spending her Bitcoin. Blockchain is perceived to be innovative technology because of the transparency and permanency it can provide to recordkeeping. For instance, because a blockchain lists an entire history of transactions, anyone who wants to verify a specific transaction is theoretically able to do so. This can be done while maintaining privacy and without sharing details of the records to participants who are not entitled to view them.
Additionally, because records on a blockchain cannot be altered, it is very difficult for a bad actor to falsify or alter transaction data. Blockchain is also perceived as a valuable innovation due to the decentralized nature of its technology, which is powered by a number of different nodes that participate in maintaining the entire system and verifying a transaction before it becomes part of the permanent record. Some proponents of blockchain technology view this attribute as its most important feature.
This is because blockchain proponents believe that this technology facilitates the creation of networks free from a single point of failure. Blockchain technology piques the interests of many consumers, technologists, and regulators because it is said to have other applications outside of the world of virtual currencies. At the same time, Bitcoin can provide very high levels of security if used correctly. Always remember that it is your responsibility to adopt good practices in order to protect your money.
Read more about securing your wallet. The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Bitcoin.
If you receive payments with Bitcoin, many service providers can convert them to your local currency. Any transaction issued with Bitcoin cannot be reversed, they can only be refunded by the person receiving the funds.
That means you should take care to do business with people and organizations you know and trust, or who have an established reputation. For their part, businesses need to keep control of the payment requests they are displaying to their customers. Bitcoin can detect typos and usually won't let you send money to an invalid address by mistake.
Additional services might exist in the future to provide more choice and protection for the consumer. Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address.
However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy. Read more about protecting your privacy. Transactions don't start out as irreversible. Instead, they get a confirmation score that indicates how hard it is to reverse them see table.
Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average.