ST. LOUIS – If the concept of cryptocurrency is foreign to you, you’re not alone. Here’s a crash course on what it is and how it works.
“It’s the new way to digitally transfer money to one another over the internet,” said financial expert Andre McHugh.
McHugh says you can buy and sell crypto in multiple ways. Some use digital exchange platforms like “Coinbase”, “eToro,” and “Robinhood.” Create an account, deposit money from your traditional bank account, and soon you’ll be able to buy and sell crypto coins. Those coins are encrypted with their own unique digital address. Think serial numbers.
“That serial number goes wherever across the internet and value is assigned to that. It’s verified by what’s called blockchain technology,” McHugh said.
McHugh describes blockchain as a secure digital ledger of transactions. Those transactions are permanent, cannot be altered, and cannot be reversed. Once blockchain verifies a crypto transaction, it adds the new block to the existing chain. Crypto values can fluctuate wildly.
“One day I can buy a pizza. The next day I can buy a Ferrari with it. There’s a problem with that. We need stability,” McHugh said.
Despite the volatility, McHugh believes cryptocurrency is here to stay.
“The possibilities are endless with this,” he said.
Allen Brown agrees. The St. Francois County resident says he started slow but ramped up his crypto portfolio using the Coinbase exchange.
“Bitcoin, mostly. A little bit of Ethereum as well and then some of the cheaper altcoins. Just to see if they go anywhere,” Brown said.
And it did. Mainly modest returns, but enough to keep him interested. Allen says it was a problem free experience until he checked his account one morning in late April.
“All of my altcoins got turned into bitcoin and then sent out of my account. They just liquidated my assets essentially…and took everything,” Brown said.
Nearly $10,000 worth of cryptocurrency gone. Allen believes a hacker accessed his computer and changed his email settings so he wouldn’t get transaction alerts from Coinbase.
“It seemed as if I got no response from Coinbase, but in fact I did and I just didn’t realize it,“ Brown said.
Because he hadn’t logged out of his Coinbase account, he believes the hacker was able to easily drain his digital wallet.
“if you’re going to use cryptos, and you’re worried about something like this, always sign out,” he said. “If I was signed out of my account when they took over my computer, they wouldn’t have been able to take over.”
There is hope the alleged hacker could be caught. A Coinbase representative tells me its fraud team is actively investigating this case. Coinbase says its platform was not breached and ruled out any improper action by its employees. There are several security measures you can take to protect yourself when dealing in cryptocurrency.
Coinbase offers the following advice to protect yourself when dealing with cryptocurrency: You can see an overview below and the full details in the Coinbase Help Center.
- Use a strong unique password for each of your online accounts
- Do not store API key data in a public space or forum
- Ensure all financial accounts and email have 2FA (two-factor authentication) enabled, preferably using a TOTP code generator (Time Based One-Time Passcode
- Regularly sign out of your Coinbase account
- Ensure your mobile device carrier has additional security features enabled for your cellular account
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