Bit coin, Ethereum and Ripple are all examples of digital currencies that have caused a frenzy in the market, bitcoin particularly has been in the spotlight for its value which in 2017 soared to more than 1,900% at around $20,000, before falling to around $14,000 in February this year. Digital currencies have two separate components, a piece of code like a virtual IOU of ownership. Then there is a distributed network that maintains a ledger of balances. The names of buyers are not revealed – only their wallet IDs. While the transaction is in a public log digital currency users can buy or sell anything without easily tracing it back to them. However digital currencies are very risky investments because prices have been extremely volatile and the technology is new and unproven. There is also a high risk of fraud due to the lack of clarity regarding digital currency trading, and fraudsters have taken advantage of this.
