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What are virtual currencies and what should I know if I’m interested in using one?

Virtual currencies, such as Bitcoin, are a way for people to track, store, and send value over the Internet. If you’re thinking about using a virtual currency, there are a few things you should keep in mind:

  • Virtual currencies are targets for hackers, who have been able to breach sophisticated security systems in order to steal funds.
  • Virtual currencies can cost you more to use than credit cards or even regular cash once you take exchange rate issues into consideration.
  • If you use a virtual currency, you might be at a higher risk for fraud.
  • If you trust a company to hold your virtual currencies and something goes wrong, that company may not offer you the kind of help you expect from a bank or debit or credit card provider.

While virtual currencies offer the potential for innovation, a lot of big issues have yet to be resolved – some of which are critical. 

Some people and businesses accept them as a form of payment, treating virtual currencies like a foreign currency or form of money – though virtual currencies are not backed by a government or central bank. 

If you have an issue with a virtual currency product or service, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).