How to Avoid Bitcoin Scams?
Bitcoin is money, and where’s money — there are scams. Although BTC and other cryptocurrencies were built with safety and security in mind, it’s virtually impossible to eradicate scams completely. Hence, fraudsters have found many different ways to trick people into giving them money, no matter how secure the victims are.
Therefore, if you’re new to the cryptocurrency world, there are several things you should take into account to maximize your protection and avoid all the pitfalls created by cybercriminals.
What is a Bitcoin Scam?
Essentially, a Bitcoin cryptocurrency scam is any criminal behavior on the web that aims to extract money from the victim’s wallet. Scammers usually make promises to their victims and ask them for money by using fake websites, sending scam emails, offering to sell non-existing products, and more.
Bitcoin is just one of many possible cryptocurrencies used for scamming people. So, let’s see what kind of BTC scams are there and how they work.
What Types of Bitcoin Scams Are There?
Before we start discussing Bitcoin and blockchain schemes, you should take into account that this list is not final. Cybercriminals can get pretty innovative when it comes to tricking people, so be very careful about how you spend your cryptocurrencies.
Although people are now more aware of fake exchanges, it wasn’t always like that. One of the most significant examples of a phony exchange is BitKRX from South Korea. It marketed itself as one of the biggest in the industry and offered great value. Naturally, Bitcoin owners never faced a similar scam before and decided to try the exchange, investing a lot of BTC in it. However, this “trading platform” turned out to be a scam. It just took the money and disappeared. Every single transaction was stolen.
To make sure you’re not opening an account on a fake exchange, you should stick to those that are reputable and licensed, such as Godex, which is also available for Windows, Android, and iOS devices. That way, you will not have to worry about being scammed in any way.
Although BTC Ponzi schemes are busted quickly nowadays, there are recorded cases from time to time. One of the biggest cryptocurrency fraud schemes took place in 2019. Four persons were arrested for stealing more than $722 million in cryptocurrencies. They operated a platform called BitClub Network, which attracted investors looking to engage in mining. However, investors never saw any money from that platform.
Many scammers offer Bitcoin alternatives to new investors. Although there are hundreds of legitimate altcoins out there, there are several fake ones, and investing in them means giving your money away. For example, My Big Coin offered a “great” BTC alternative for a cheap price but only took the money and disappeared. Therefore, you should research whether a cryptocurrency is legitimate or not before deciding to make a transfer.
Phishing: The Nigerian Prince
The Nigerian Prince is a common name used to denote old-school scams. They were popular more than fifteen years ago and resulted in a lot of fiat money being stolen. The bad news is that they still work and people fall hard for them — even with cryptocurrencies. In other words, there will always be somebody willing to donate BTC to the Nigerian Prince and expect millions of dollars in return.
Beware of Fake ICOs
The biggest scams in the crypto world were presented as ICOs. A crypto ICO stands for Initial Coin Offering, and it’s a type of crowdfunding where investors can support an idea or a project by buying its cryptocurrency (these are often referred to as tokens). Crypto ICO offers an innovative way to invest in great projects and even have something in return if the project is successful. You don’t have to be a professional investor to buy several tokens as part of a crypto ICO.
But the fact that many investors are completely inexperienced has made ICOs a fertile ground for scams. That’s why scammers create believable crypto ICO projects, writing entire whitepapers, and making fake LinkedIn profiles for team members. With no prior experience in this type of scams, even seasoned investors fall for it and lose their money.
A crypto ICO scam is not a common sight nowadays, but there were cases back in the day that managed to raise hundreds of thousands of dollars and disappear with the money. However, this doesn’t mean that there are no crypto ICO scams right now. It’s just that they cannot raise as much money as their predecessors. In fact, a typical crypto ICO is quickly busted if its intentions are not honest.
How to Avoid Bitcoin Scams — Essential Tips
Every scam is designed to make you deposit as much BTC as possible. A Bitcoin scam usually looks too good to be true. Simply put, if you stumble upon a crypto ICO or any other investment opportunity that promises high ROIs, you should consider it a red flag and research it.
Every online security expert will tell you that rule #1 is to research the platform before making any sudden moves, such as depositing money. Whenever you’re not sure about a project, there are probably users who’ll tell you more from their personal experience. So, that’s one of the safest ways to know whether something is worth taking into account.
Avoid Suspicious Sites
There are many ways to tell whether a website is legitimate or not. First of all, you need to check it’s security. The good thing is that browsers such as Chrome will notify you immediately if a site lacks proper security protocols.
After that, make sure that the site’s address is correctly spelled, as many scammers employ this trick to lure users. This doesn’t mean that a website is a scam, but it should make you more cautious while you’re browsing it.
Other things that make a site suspicious include promises of great returns and lack of real people on the About Us page (if there are social media links, make sure to check their profiles thoroughly to confirm that they are indeed real). Many crypto ICO offers will make everything look real, but if you dig deep enough, you’ll find inconsistencies.
Use Trusted and Reputable Platforms
If you’re about to start your cryptocurrency journey, the best way is to stick to trusted and reputable platforms. For example, there are sites that review every crypto ICO or new cryptocurrency on the market. They do it in an unbiased and honest way, which is why they have a high reputation in the cryptocurrency space.
Use Common Sense
One of the essential things in spotting scams related to Bitcoin and other cryptocurrencies is to use common sense. Every scam will have something that will give it away in one way or another. If things don’t add up in the end, it’s probably because it’s true, and you’ll end up losing your money.
To sum up, there are many cryptocurrency scams out there at the moment. They come in the form of a crypto ICO, a scam website, a fraudulent mail, and more. Once you understand how the industry works, you’ll be able to separate the wheat from the chaff.
Investing is a job that requires skill rather than luck. It takes time, and it takes practice. You might stumble upon several pitfalls on your way to become a professional cryptocurrency investor, but make sure that your losses are minimal, no matter whether you invest in a crypto ICO or use a crypto exchange to trade.
Originally posted at https://godex.io
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