Another BitCoin Scam!
July 15 was a Horrible Day for Twitter! The Celebrity Accounts with 1 Million above Followers were Hacked & a Tweet appeared asking to Donate Bitcoin from the Followers while Offering double in return.
The Top Accounts hacked were Warren Buffett, Bill Gates, Elon Musk etc. The Interesting thing was the Hackers were using Bitcoin Wallet addresses for accepting money.
The hack happened by Social Engineering the Back Office application of Twitter where the Twitter Account’s Email can be changed thereby requesting Password for Reset. The Hackers only used few hours for the Tweet & Gained Although Twitter was able to Regain control of the Accounts.
The main loosers were the Blind Crowd who donated money believing this! Although much money was not lost in the issue, Twitter lost $1 Billion in market share due to this security breach. FBI is investigating the matter
Points to Note!
What we can Learn from this Incident are:
- Do not Fall in Get Rich Quick money schemes
- Learn the Fundamentals of Scrip before Investing
- Bitcoin & Crypto Currencies will attract more Regulations
- Bitcoin prices can crash & affect upward trends
Bitcoin is a Cyrpto Currency based on Block Chain which Links the Transactions using Encryption. Here the advantage is De-Centralization so that No Dependency on Banks or Regulatory Organizations needed. The transactions can be performed 24 hours a day & 7 days a week which makes it Convenient at reduced Transaction Cost too.
People started using Bitcoin for Digital Transactions & In Developed Countries the Retail Stores were also accepting Bitcoin. (eg: Starbucks)
Some crooked brain found an Opportunity in Bitcoin & Marketed it as an Investment Vehicle! The reasons they highlighted were De-centralization, No brokers involved, Faster transactions, Blockchain technology etc.
The hype run for few years from 2014-2018 & the Price of Bitcoin gained 10000X returns!!
This made few people sell their house & invest in them. None of them understood that they were Fooled by a Marketing Campaign! Later the Bitcoin crashed 80% from the Peak making Heavy Loss for Investors!
Bitcoin is NOT a Good Currency!
People has to understand that a Currency should have following qualities which Bitcoin failed:
- STABILITY IN PRICE makes people rely on it for transaction. If the price varies too much daily, then people will nt Transact it. If the price goes up, the buyer will not send it. If the price goes down, the receiver will not accept it. Bitcoin does not possess Stability in Price – 10000% growth in 1 Year & 500% Crash in 1 Year… who will transact with it?
- STORE OF VALUE as the price is not stable it cannot be a store of value like Gold.
- SPEED OF TRANSACTION should be good for a Currency which Bitcoin failed. Bitcoin Transactions are taking mroe delay than VISA transfers.
- INFINITE PRINTING NOT POSSIBLE where the dollars, rupees can be printed infinitely based on GDP calculations .. but BITCOIN have a FINITE LIMIT!
- ANONYMOUS TRANSACTIONS leads to Crime Increase. If a currency transaction cannot be traded, then Criminals will start using it. Thus Bitcoin was heavily used by Drug Dealers, Blackweb Merchants & Scammers like above. This will also attract more Regulations by Governments which will make Bitcoin loose its very purpose of De-Centralization!
I know most of the Investors do not think about these – that is the reason they burnt the money – People sold their house and invested to see their wealth got wiped away..
That is the reason Warren Buffet calls Bitcoin as Rat-poison squared!
Bitcoin is NOT a Good Investment!
Following are my view on bitcoin as an investment..
- Bitcoin does not have Profit & Loss account
- Bitcoin does not have underlying company which offers growth
- Bitcoin does not have a Base Value
- Bitcoin is fluctuating on news & events
So all these makes a VALUE INVESTOR stay away from the Fake Currency!
Bitcoin as an Investment requires cutting-off the Supply! However it will affect the real-purpose of Bitcoin which is Digital Currency used in Transactions!
All these makes us to call Bitcoin as a Gambling! People do Gambling making sure that:
- They will only put Money which they can Afford to Loose & Hold for very long term like 20 Years
- If they win, they will win heavily (10000X etc.)
- If they loose, they will loose negligibly (Rs. 1 Lakh etc.)
It is the Amateurs, Day-Dreamers & Shortcut Seekers falling in Trap of all these Fake Investments.
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