What can you buy with cryptocurrencies?

When it was initially launched, Bitcoin was intended as a medium for everyday transactions to allow you to buy everything from a cup of coffee to a computer or even high-value items like real estate. Such a concept has yet to materialize, and despite the fact that the number of institutions accepting cryptocurrency prices is increasing, large transactions with them are very rare. Still, it is possible to buy a wide variety of products on e-commerce websites using cryptocurrencies. These are some examples:

Technology and e-commerce sites:

Many companies that sell technology products accept cryptocurrencies on their websites, such as newegg.com, AT&T, and Microsoft. Overstock, an e-commerce platform, was one of the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it.

luxury products:

Some luxury goods retailers accept cryptocurrency as a form of payment. For example, online luxury goods retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in exchange for Bitcoin.

Cars:

Some vehicle dealers (from general brands to luxury dealers) already accept cryptocurrencies as payment.

Insurance:

In April 2021, the Swiss insurance company AXA announced that it would start accepting Bitcoin as a payment method for all its insurance lines, except for life insurance (due to regulatory issues). Premier Shield Insurance, an American company that sells auto and home insurance policies, also accepts Bitcoin for premium payments.

If you want to spend crypto at a retailer that doesn’t accept it directly, you can use a crypto debit card, such as Bitpay in the United States.

Cryptocurrency fraud and scams

Sadly, cryptocurrency crime is on the rise. Cryptocurrency scams include the following:

Fake Websites – Fake sites displaying fake testimonials and cryptocurrency jargon promising huge guaranteed returns, as long as you keep investing.

Virtual Ponzi Schemes: Cryptocurrency criminals promote nonexistent opportunities to invest in digital currencies and create the illusion of huge returns by paying old investors with new investors’ money. One scam operation, BitClub Network, amassed more than $700 million before its perpetrators were convicted in December 2019.

“Celebrity” Endorsements: Scammers online pretend to be billionaires or famous people who promise to multiply your investment in virtual currency, but instead steal what you sent. They can also use messaging apps or chat rooms to start rumors that a famous businessman is endorsing a specific cryptocurrency. Once they have encouraged investors to buy and increase the price, the scammers sell their investment, which lowers the value of the coin.

Romance Scams: The FBI has warned of a trend in online dating scams, in which scammers persuade people they meet on dating apps or social media to invest or trade in virtual currency. The FBI’s Internet Crime Complaint Center recorded more than 1,800 reports of cryptocurrency-focused romance scams in the first 7 months of 2021, with losses approaching $133 million.

Alternatively, scammers can pretend to be legitimate virtual currency dealers or set up fake exchanges to trick people into giving them money. Another cryptocurrency scam involves fraudulent sales strategies for cryptocurrency individual retirement accounts. Then there is direct cryptocurrency hacking, in which criminals break into digital wallets where people keep their virtual money to steal it.

Are cryptocurrencies safe?

Cryptocurrencies are often created using blockchain technology. A blockchain describes how transactions are recorded in “blocks” and time-stamped. It is a somewhat complex and technical process, but the result is a digital ledger of cryptocurrency transactions, which is difficult for hackers to manipulate.

Additionally, transactions require a two-factor authentication process. For example, you may be asked to enter a username and password to initiate a transaction. Next, you may need to enter an authentication code that is sent in a text message to your personal cell phone.

Although security measures have been implemented, that does not mean that it is impossible to hack cryptocurrency prices. Several large-scale hacks have severely damaged cryptocurrency startups. Coincheck and BitGrail were attacked by hackers, who respectively made off with $534 million and $195 million. These were the two biggest cryptocurrency hacks of 2018.

Unlike government-backed money, the value of virtual currencies is entirely driven by supply and demand. This can cause wild swings that can lead to huge gains for investors or huge losses. Additionally, cryptocurrency investments are subject to far fewer regulatory protections than traditional financial products like bonds, stocks, and mutual funds.

Four tips to invest safely in cryptocurrencies

According to Consumer Reports, all investments carry risk; however, some experts consider cryptocurrencies to be one of the riskiest investment options out there with cryptocurrency prices. If you want to invest in cryptocurrencies, these tips can help you make informed decisions.

Investigate the bags:

Before investing, find out about cryptocurrency exchanges. It is estimated that there are over 500 bags to choose from. Do your research, read reviews and talk to more experienced investors before proceeding.

Learn how to store your digital money:

If you buy cryptocurrencies, you must store them. You can keep them in a bag or digital wallet. Although there are different types of wallets, each one has its benefits, technical requirements, and security levels. Just like bags, you should research your storage options before you invest.

Diversify your investments:

Diversification is key to any good investment strategy; this is still valid if you invest in cryptocurrencies. Don’t put all your money in Bitcoin, for example, just because that’s the name you know. There are thousands of options and it is better that you diversify your investment in several currencies.

Prepare for volatility:

The cryptocurrency market is very volatile, so you need to be prepared for the ups and downs. You will see drastic changes in prices. If your investment portfolio or mental health can’t handle it, cryptocurrencies may not be a wise choice for you.

Cryptocurrencies are all the rage today, but remember that they are still relatively in their infancy and are considered highly speculative with cryptocurrency prices. Investing in something new has its challenges, so be prepared. If you plan to participate, do your research and invest conservatively to start.

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