Hoax is a self fabricated and false story that lacks evidence and is used to mislead people.
The story is fabricated and spread in such a way that it seems to be true.
In the digital world the term hoax is often used as short of a virus hoax.
A virus hoax is a statement telling the reader that a virus attack is under way and he might be vulnerable to that attack, or the message may tell the reader that his computer had been infected by a deadly virus and he must download a specific security product to secure his computer otherwise he will lose all his data and information.
The message usually encourages the reader to forward this message to as many people as he can and so the message quickly turns into a chain email that starts creating panic.
The writers of these hoaxes often quote that the information given in the message is verified by reputable companies such as Microsoft, Google, CNN, Yahoo etc just to increase the credibility of the hoax and so that more and more people will believe in the story.
However hoaxes can be easily identified by carefully reading the message. In a hoax a virus is almost supposed to do things that are in reality not possible like delete everything on the computer hard disk or blow up the BIOS of computer.
Technically speaking hoaxes are totally harmless and have no capability of harming the computer or a network. Still they are a big waste of time for both who identify it as a hoax and those who believe it to be true.
Hoaxes also waste the bandwidth of a network making it slow for useful purposes. The best thing to do with a hoax is to immediately delete such an email or message so that it might not spread further.