BOISE - The term "cryptocurrency" was unfamiliar to many just a few months ago, but has become mainstream recently, in large part due to surge of Bitcoin.
There are a number of virtual investment opportunities available, and with that come a word of caution for potential investors.
On Thursday, the Idaho Department of Finance cautioned consumers looking to invest in cryptocurrency.
The basic message: Do your research.
There are dozens of these types of companies out there and, unfortunately, not all of them are legit. That's because the cryptocurrency market is largely unregulated, extremely volatile and subject to theft or hacking.
Jim Burns, Idaho's Securities Bureau chief, says he is also skeptical of cryptocurrency because it has yet to find a foothold in the everyday consumer marketplace.
"I think the technology is very exciting and it's going to have a lot of uses across a lot of industries," Burns said. "Now as to virtual currencies and stores of value I'm a little more suspicious relative to that because we are not seeing the adoption for everyday uses, like at the grocery store. People do accept it, but until you get very, very broad acceptance you're not going to see it used as a currency very regularly."
One place it has caught on is Boise TechMall, where several companies under one roof accept cryptocurrencies such as Bitcoin.
But even Rich Want with Computer Central agrees - caution is the best approach, and you need to understand that it's not like investing in standard currencies.
"More often than not it's more of a crowd funding kind of a thing," Want said. "It's an idea, it's an effort to raise money to do something but there isn't any backing. "You don't own a piece of anything; You've just put your money in."
Want also says smart investors will welcome regulation into this relatively new field of finance.
In addition to very little government oversight on cryptocurrency, there are other reasons to proceed with caution.
For starters, it is not insured by the Federal Deposit Insurance Corporation. By contrast, bank deposits are insured up to $250,000.
The high volatility of cryptocurrencies mean the actual value changes often, and plunge quickly.
And because of a lack of security systems in place, funds can be stolen or hacked.
The Idaho Department of Finance says there are a few red flags to watch out for when it comes to cryptocurrency fraud, including offers of guaranteed returns, unsolicited offers, and high-pressure sales encouraging you to buy immediately.
In other words, if the offer sounds too good to be true, it probably is.