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Digital Currency: Convenient for Users; Convenient for Robbers

03 Mar

Bitcoins are always portrayed as tangible "coins" rather than intangible, digital "bits" [courtesy Google Images]

Bitcoins are always portrayed as tangible “coins” rather than intangible, digital “bits”
[courtesy Google Images]

Reuters recently reported in “Bitcoin exchange Mt. Gox disappears in blow to virtual currency” that,

“Mt. Gox, once the world’s biggest bitcoin exchange, looked to have essentially disappeared on Tuesday, with its website down, its founder unaccounted for and a Tokyo office empty bar a handful of protesters saying they had lost money investing in the virtual currency.

“It was not clear what has become of the exchange, which this month halted withdrawals indefinitely after detecting ‘unusual activity.’  A global bitcoin organization referred to the exchange’s ‘exit,’ while angry investors questioned whether it was still solvent.”

What’s been done to Mt Gox Bitcoins can be done to any other digital currency—including the fiat dollars in your credit cards, debit cards, bank accounts and pensions funds.  It can all be made to disappear in moment, and investors can be left with nothing.

If you’re investing your savings in a digital currency, a virtual currency or a fiat currency, you’re gambling just as surely as those who’ve invested their wealth in Bitcoins.

 

•  Reuters published another article entitled “360 Million Newly Stolen Credential on Black Market” which reported,

“A cybersecurity firm said on Tuesday that it uncovered stolen credentials from some 360 million accounts that are available for sale on cyber black markets, though it is unsure where they came from or what they can be used to access.

The discovery could represent more of a risk to consumers and companies than stolen credit card data because of the chance the sets of user names and passwords could open the door to online bank accounts, corporate networks, health records and virtually any other type of computer system.

“. . .  an unprecedented amount of stolen credentials is available for sale underground. . . .  the 360 million records were obtained in separate attacks, including one that yielded some 105 million records, which would make it the largest single credential breaches known to date. . . . the credentials were stolen in breaches that have yet to be publicly reported. The companies attacked may remain unaware until they are notified by third parties who find evidence of the hacking. . . .”

Digital currency, digital bank accounts, digital credit cards, digital debit cards, and digital fiat currencies are incredibly convenient for the people who use them.  They are also incredibly convenient for the people who’d like to rob them–and that includes your government.

Again, if you’re investing your savings in a digital currency, a virtual currency or a fiat currency, you’re gambling just as surely as those who’ve invested their wealth in Bitcoins.

It’s impossible for most people to completely avoid the use (and convenience) of digital currency.  But, if you want to protect the core of your wealth, you need to store at least some of your wealth in a tangible medium like physical gold or physical silver.

 

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5 responses to “Digital Currency: Convenient for Users; Convenient for Robbers

  1. tim

    March 3, 2014 at 9:22 PM

    Good advice! Thank you.

     
  2. Toland

    March 3, 2014 at 9:38 PM

    Like after the Crash of ’29, the implosion of, and likely insider theft by, Mt. Gox has many Bitcoiners clamoring for government regulation to prevent this sort of thing happening again. They will probably get what they’re asking for.

    Lots of other shady goings on with Bitcoin. Several black market trading sites on the internet, and…

    Bitcoin is the offshore tax haven of the future

    http://www.kernelmag.com/features/report/9122/bitcoin-is-the-offshore-tax-haven-of-the-future

     
  3. moon

    March 5, 2014 at 1:27 AM

    Possibly the most important word in that article is second to last…physical. In my opinion, the second most important word may be the last…silver.

    Of course, no portfolio would be complete without Bitcoin, FRNs, and Beanie Babies…physical.

     
    • J.M.

      March 12, 2014 at 4:03 AM

      @ > Beanie Babies

      This is a good user name for you, or, tiny Beanie weeny. Know what I mean? What’s up? You didn’t pull out a short hair & pee on yourself lately did you? LOL LOL LOL

       
  4. palani

    April 26, 2015 at 6:54 AM

    http://cointelegraph.com/news/113897/bitcoin-violates-the-principle-of-fungibility “Bitcoin, among a slate of other cryptocurrencies, violates the principle of fungibility within money – that is, each coin’s transaction history differentiates them from every other bitcoin in circulation. With the collapse of the hidden Evolution Marketplace, these coins have now been tainted, and services are wilfully denying their deposit into wallets held by exchange businesses.”

    The article quoted does not consider that any Federal Reserve Note also violates the same principle. Anything that comes to you with a serial number is subject to having a history that identifies that note or that bitcoin from all others.

     

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