New Cryptocurrency Scam Could Be Targeting You Online

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Cryptocurrency is a big buzzword in the financial world right now. Essentially functioning as a high-risk investment for many, the new form of currency has generated a lot of interest from a very online subset of people. Many investors have been caught up in the craze, with some very young people online also trying their hand at “mining” the digital currency.

However, not everything is great about the so-called “future of money”. A new scam involving cryptocurrency has swindled tens of thousands of dollars from would-be investors, leaving a bad taste in the mouths of those who were previously gung-ho for the new form of currency.

How Does Cryptocurrency Work?

Crypto, in short, is a form of digital verification indicating unique tokens that can be exchanged between users. Bitcoin, the most popular of the currency forms, is “mined” by computer systems that solve complex math problems. To solve these problems, a computer needs to use considerable power, which presents a financial barrier to would-be miners. This has also caused the technology to gain considerable pushback from environmental groups.

Once a coin is generated, it’s given a unique numerical ID and is tracked by a form of technology called a “blockchain”. A blockchain is essentially a verification network that can trace every exchange for each coin in the chain, using unique codes to keep up with who has which currency.

The original idea behind cryptocurrency was that it would allow money to be decentralized. However, the result has been messy, due to the lack of true legal oversight and the novelty of the technology.

Wallet-Harvesting Scams

In order to store your cryptocurrency, you need to use a digital wallet. That wallet has a unique password that you have to protect, or else scammers can access your currency. Some enterprising scammers have jumped on the opportunity to fleece newcomers for their digital coins.

Many wallet applications don’t have mobile apps and can instead only be accessed from desktop. However, unscrupulous scammers have created look-alike apps that look very similar to the desktop version of some wallet applications. These look-alike apps are actually phishing endeavors that steal user’s wallet IDs and passwords.

While normally phishing presents a slight frustration that causes you to change your passwords, phishing for wallets is much more immediately damaging. Some victims have lost hundreds of thousands of dollars in digital coins to such scams. So, if you use online wallets to store cryptocurrency, be extremely careful about where you input your information. You stand to lose all of your digital currency if the wrong person gets your information.