Scam of the day – March 9, 2014 – Another bitcoin exchange hacked – what it means to you

Bitcoins have been around since 2009, but have recently been very prominent in the news and not for good reasons.  Bicoins are a system of digital currency that can be used throughout the world.  Unlike other online payment systems such as PayPal, there are no charges or commissions for using bitcoins.  Some speculators have gone into trading bitcoins, which is indeed a risky investment.  Unfortunately, bitcoins are not a true currency issued by a government and regulated by any nation.  Also, unfortunately, the security of the major bitcoin exchanges has not been as secure as major banks and other major financial institutions and they have been easy pickings for hackers whose recent hacking into the largest bitcoin exchange, Mt. Gox resulted in a loss of 850,000 bitcoins and a declaration of bankruptcy by Mt. Gox.  Now Flexcoin, another bitcoin exchange has been hacked causing the immediate closing of the company.

TIPS

I suggest that you avoid bitcoins.  As an investment they are highly speculative and their value could easily plummet for many reasons including the general lack of security by major bitcoin exchanges.  As for using them as currency, the lack of regulation makes them a risky way to pay for goods as well as the fact that you are seriously limited as to the places that will accept bitcoins.  Don’t get caught in the hype.