You may recognize those terms being associated with cybercriminals holding your personal information hostage. Often you’re instructed to pay the ransom using Bitcoin, if you want your files decrypted.
Despite the negative connotation, Bitcoin and other cryptocurrencies are becoming a popular alternative form of payment and potentially profitable investment vehicles.
What are cryptocurrencies?
Cryptocurrencies basically are digital assets designed to work as a medium of exchange, according to Wikipedia.
Even though many of them have the term “coin” in their name, they usually don’t come in physical form.
The website blockgeeks.com provides a great summary:
“Cryptocurrencies are digital gold. Sound money that is secure from political influence. Cryptocurrencies are a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous.”
They also highlight five attractive qualities of using cryptocurrency either as a method of payment or investment vehicle:
“1.) Irreversible: After confirmation, a transaction can‘t be reversed. By nobody. And nobody means nobody. Not you, not your bank, not the president of the United States, not Satoshi, not your miner. Nobody. If you send money, you send it. Period. No one can help you, if you sent your funds to a scammer or if a hacker stole them from your computer. There is no safety net.
“2.) Pseudonymous: Neither transactions nor accounts are connected to real world identities. You receive Bitcoins on so-called addresses, which are randomly seeming chains of around 30 characters. While it is usually possible to analyze the transaction flow, it is not necessarily possible to connect the real world identity of users with those addresses.
“3.) Fast and global: Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes. Since they happen in a global network of computers they are completely indifferent of your physical location. It doesn‘t matter if I send Bitcoin to my neighbor or to someone on the other side of the world.
“4.) Secure: Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography and the magic of big numbers makes it impossible to break this scheme. A Bitcoin address is more secure than Fort Knox.
“5.) Permissionless: You don‘t have to ask anybody to use cryptocurrency. It‘s just a software that everybody can download for free. After you installed it, you can receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper.”
Big-name stores accept it
Bitcoin, the most popular cryptocurrency developed in 2009, is accepted as a valid form of payment by a growing number of retailers.
Overstock.com, Expedia.com, Target, Subway, Whole Foods, Dell, Dish Network, and dozens of others will allow you to buy products or services and pay with Bitcoin.
Better returns than the stock market
Teeka Tiwari, editor of the Palm Beach Letter, encourages his investors to purchase Bitcoin and other select cryptocurrencies for investing.
His research shows investing in cryptocurrencies outperforms the stock market by huge percentages. He admits, of course, it is more volatile and risky and no one should put their entire nest egg into it.
How do you get it
The easiest way to obtain Bitcoin and other cryptocurrencies is by buying them through an exchange service. Coinbase is one of the most popular and easiest to use.
For more details on cryptocurrencies and step-by-step instructions on how to obtain them, visit http://bit.ly/cryptocurrencyguide.
NOTE: Information provided in this column is not intended to provide any form of financial or investment advice or counseling. Seek assistance from a qualified investment advisor before purchasing or investing in any cryptocurrencies.