Bitcoin Twitter scam: What is the cryptocurrency?

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The Twitter accounts of famous faces from the worlds of politics, music and business appear to have been hacked on Wednesday in a cryptocurrency scam.

Amazon chief executive Jeff Bezos, Tesla founder Elon Musk and Microsoft’s Bill Gates all saw their Twitter accounts posting saying any donation of 1,000 US dollars in Bitcoin would be returned with 2,000 dollars of the cryptocurrency.

Kanye West, Joe Biden and Barack Obama’s accounts also posted similar messages.

Here, the PA news agency answers some questions on Bitcoin:

– What is it?

Bitcoin is an entirely virtual currency that works without the need for a central bank, and can be sent over the internet. Coins are transferred directly from person to person, and are kept in a digital wallet that can be accessed on a computer or mobile device.

– What is a digital wallet?

A digital wallet is a place where Bitcoins, and other cryptocurrencies, can be stored. They are a string of up to 34 letters and numbers which acts as a path to address payments.

There is no way of linking wallets to real life names and numbers which helps with the anonymity of the currency.

Creating new coins is done through a process called “mining” where users are rewarded with new coins for verifying transactions that take place.

– How is the value of Bitcoin set?

Bitcoin has its own value and is not tied to any physical currency, which means that laws of supply and demand have seen the price fluctuate.

In December 2017, one bitcoin was worth nearly £15,000, having been valued at around £700 one year earlier. The current value is around £7,000.

Bitcoins are stored on digital wallets
Bitcoins are stored on digital wallets (Rick Findler/PA)

Fears have consistently been raised that a digital currency without a regulator or central bank is ripe for abuse by hackers and money launderers.

The WannaCry ransomware attack of 2017, which infected computers worldwide including within the NHS, saw victims’ data being encrypted with ransom payments in Bitcoin demanded.

The privacy of Bitcoin and other cryptocurrencies means that while transactions and balances are publicly accessible, the people behind the wallets are not, and tracing perpetrators of illegal activities is harder.

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