While the value of bitcoin has been volatile over the past few weeks, its popularity has steadily increased. Financial gurus like Mark Cuban and Warren Buffett have weighed in, offering their takes on why one should or shouldn't jump on the bitcoin bandwagon.
No matter how you feel about cryptocurrency generally, though, it's useful to know that the Federal Trade Commission in a 2015 report recently resurfaced and promoted by the Better Business Bureau makes clear that spending bitcoin can be risky. Even a couple of years ago, the FTC says, it had already "received hundreds of complaints involving bitcoins and other virtual currencies."
That's partly because digital currency is created and stored electronically, the report notes, "which means it is not overseen or backed by a national government. Since there is no regulatory agency, the value of bitcoin can fall just as quickly as it can rise, depending on demand.
"Payments made with virtual currencies are not only irreversible," the report continues, "they also do not have the same legal protections as most traditional payment methods, such as the ones you have when using a credit card."
Some online merchants that accept bitcoin as payment, according the FTC, may not deliver the product on time or may only offer refunds in the form of store credit, not currency: "That is why it is important to always know the seller and their policies before making a purchase."
Currently, 100,000 merchants worldwide accept bitcoin. That includes some big-name brands like Microsoft, Expedia and online-electronics retailer Newegg. It's rumored that Amazon could soon begin accepting cryptocurrencies, too.
According to Bitcoin.com, there are more than 16 million bitcoin in circulation and 12,000 transactions made per hour.
If you're making one of those transactions, or considering it, make sure to do your homework first. Check out the seller's reputation and only chose to engage with companies you trust, suggests the FTC.
"Make sure you know where the seller is located and how to contact someone if there are problems," because often "the only way to get a refund is through the seller or payment processor."
Bitcoin's value was just above $15,000 Wednesday, according to the digital-currency website CoinDesk, which tracks prices from digital currency exchanges Bitfinex, Bitstamp, Coinbase and itBit.
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