Bitcoin is an excellent example of cryptography implementation because the potential to produce something unique in the digital age is precious. Unfortunately, the value of Bitcoin has continued to rise since its inception, increasing the scammers’ attention. These scammers look to earn money through nefarious techniques.
Following are some common bitcoin scams you will encounter, along with tips on avoiding them.
Bitcoin exchange platforms
You would have come across social media adverts that offer bitcoin for 5% lesser value or more. This is usually a trick used by fake exchange platforms to lure people in. When you click on the advertisement, you will be directed to another page, where a flashy website with totally positive feedback will appear. Chances are, they are fake exchange platforms. Do not fall for such a scam. The majority of these phony exchanges appear one day and vanish the next. They will exist briefly, then disappear, only reappearing with a new domain name.
Avoiding tip: When you visit the exchange platform, make sure the URL begins with HTTPS and not HTTP. This is a big red flag that you should know about. Make sure you look at them on the Financial Conduct Authority (FCA) website.
The phishing scam is a tweaked version of a well-known ancient scam. Whereas the traditional phishing scam entailed obtaining banking credentials, the new crypto phishing scam entailed getting private crypto keys and crypto-wallets. The crypto scam can take many different forms, such as receiving an unexpected phone call from a fraudster impersonating a bank official or an email from someone attempting to help you organize your crypto in return for your credentials.
Avoiding tip: To avoid being cheated, mark the sites you visit to trade cryptocurrencies.
A Ponzi scam is a typical con that entices new investors by promising them astronomically large profits. A promoter of a Ponzi scheme persuades individuals to participate in their plan and then pays out “returns” that are distributions from newer participants’ money. The cycle continues until fresh investors are recruited, or the promoter withdraws the funds and vanishes.
Avoiding tip: Ponzi scams are a popular pyramid scheme that is typically easy to identify. Honest persons or projects will not guarantee a 100% or higher return on your Bitcoin investment.
Cybercriminals use fear to induce you to allow them permission or pay them your Bitcoin by blackmailing you over the phone or email. The scammers usually claim to have evidence of wrongdoing against you and threaten to release it to your close friends unless you provide them with Bitcoin. These assertions are most likely bogus. The scammers do not know about you and are hoping to persuade a few people to send them Bitcoin by sending out enough emails or making enough phone calls.
Avoiding tip: When you receive such an email or call. Please do not believe them and do not hesitate to inform the FBI.
Since not all cloud mining enterprises are frauds, this cannot be easy. Some are perfectly real, but many are scams; thus, it’s best to caution people (especially newbies) while considering cloud mining. Cloud mining is a type of pooled hash power mining in which participants combine their finances to rent Bitcoin mining rigs. This works and can be profitable for lawful operations. However, returns on scams may be modest or non-existent.
Avoiding tip: Check if they provide a public mining address and offer some percent off. They shouldn’t be ignored.
It’s a little more challenging to spot phony Bitcoin wallets because wallets are mostly used to store bitcoin rather than buy or sell it. Therefore, it has less to do with the amount of money you spend and more with the program you utilize. Fake Bitcoin wallets are usually merely a way for spyware to infect your computer and steal your passwords or private keys.
Avoiding tip: Like with fake platforms, you should check for the HTTPS for bitcoin wallets.
Even if you get scammed, know that there are certain fund recovery firms that will help you get Bitcoin scam money back. These firms have experts trained for such situations. They will put in a lot of effort to get your money back from the scammers. Make sure you co-operate with them and provide them with all the necessary details.
Guidelines to protect your Bitcoin
- Don’t ever give out your wallet key or online account password to anyone.
- Don’t trust anyone who promises free bitcoin, guaranteed profits, or abnormally high profits.
- Only open emails from accounts you are familiar with.
- Make sure you’re running the most current edition of your antivirus software.
- Before continuing, thoroughly study any exchanges, wallets, or investment opportunities on all platforms, especially non-SMS, use two-factor authentication.
- Before having to send bitcoin, double-check all addresses.
- Access the platform only through bookmarked pages and not by searching for the website every time.
- Do not share your credit card information or your personal information with anyone.
- Analyze and research the prospective possibility before investing. If there aren’t many investors and only a few people stand to benefit, it’s probably a red flag.