T he world of crypto currency can seem transient and weird, especially since it’s wholly digital domain. There is no way you can go down to your local ATM and withdraw a couple of Bitcoin to stick in your pocket, so there’s always this feeling in the mind of a crypto beginner that the whole thing just doesn’t exist – it’s just fake money.
The truth is, while Crypto currency does exist only in the digital world, those little ones and zeros hold real-world value and they can be rather expensive. If the skyrocketing price of Bitcoin is any indication which was close to $19000 for a single Bitcoin as of Dec of 2017, then fortunes can be made and lost on this unique digital currency.
This brings out both the good and bad in human nature.
Unfortunately, with the bad comes con-artists. Scammers also want to profit from Bitcoin, but through depraved means. This usually involves targeting unaware victims, who end up losing their cryptocurrencies as a result.
This makes it crucially important to protect your investment in crypto. In fact, even back in the resurgence days, the defense game was used by tricksters to fool people out of their hard-earned money. With Bitcoin being a relatively new currency, yet valuable, scams revolving around the currency seem to be everywhere.
Here are few ways to avoid getting scammed out of your valuable cryptos.
- Keeping Tabs On The Service Industry
There is a lot of conveniences when it comes to purchasing Bitcoin or any other crypto currencies. Except you’re a Bitcoin miner, you can’t have BTC without buying it and investing funds that exist in a different currency. You will need to exchange your hard earned dollars or Euros for Bitcoin.
There are many services that will allow you to purchase cryptocurrencies with a credit or debit card, but these services often charge generous fees for the benefit. Not all of these crypto exchange services are created equal. Choosing the wrong service provider can leave you feeling pretty well cheated, particularly if they just take your money and disappear just like that.
However, keeping an eye on how the Bitcoin service industry development can help you to compare and contrast the different services to find the most upright ones with fewer fees
- Understanding The Underlying Technology
It’s extremely important to understand the underlying tech that controls cryptocurrency. This factor can help you to prevent from falling into traps with any cryptocurrency you choose to invest in and trade.
Your knowledge of the technology doesn’t have to be exhausting. However, you must understand the basics of digital currencies like how they’re mined through blockchain, how they can be transferred from one party to another and how crypto exchanges and digital wallets function.
This stops scammers from deceiving you and making off with your investment in a false deal. Thankfully, there are lots of instructive resources out there which you can use to gain a better understanding of cryptocurrency in general. The majority of these resources are open-source and free to check, making the entry hurdle to the crypto world lower than you might think.
- Watch for phishing attempts, especially on website URLs
Scammers can make their website URLs look just like the genuine URLs of some popular cryptocurrency exchange sites. The end result is that you go to their website by mistake and either get malware in your system or lose your cryptos through a fake sale.
It is an illusory set of sneaky tricks you should be aware of. Fortunately, you can take some measures to expose frauds and keep your funds away from them.
- Pay attention to URLs, as it will have a malicious typo. The original URL will never have typos.
- Use MetaMask or other phishing detectors. Once detected, fake accounts will be blocked.
- Never click on shortened links from untrusted sources
- Careful Clicking On Links From Unsolicited Emails
You’ve heard it a bazillion times: “Don’t click on the links in email!” That’s typically for a very good reason. This is by far one of the biggest ways we have seen clients getting bitten. It also provides scammers and other nasty individuals an easy means for enticing potential victims.
The tricks which they try to run from outdated click bait operations with emails and fake websites to hoax victims into revealing sensitive information. To protect yourself from these scams, you should:
- Deploy a SPAM filter that detects viruses, blank senders, etc.
- Keep the systems updated with the latest security patches.
- Only Use Trusted, Peer Reviewed Software
One of the factors that make cryptocurrencies attractive for many is the secrecy when making purchases. This anonymity is generally provided through different wallets. For those who are new to cryptocurrency, finding the most reliable software or wallet to make their steps into the crypto environment can be overwhelming. Similarly, more experienced traders always want to update their portfolios to their best potential.
Basically, different scammers will tell you that their software is the safest and easiest way to transfer Bitcoin anonymously.
These wallets will work flawlessly for days or even months. However, at some point, the con-artist will transfer the Bitcoins from your wallet into their own. So, make sure to do your research before choosing any Bitcoin wallet provider!
If possible, visit the official website of the Bitcoin wallet you want to download. Never download or, even worse, use a wallet app from Google Play or Apple store before reading reviews from the users. The higher the number of people who have downloaded, used and rated the app, the better!!
- Never Engage In Transactions Over Social Media
The social media scheme involves tricksters creating social media accounts that impersonate the profiles of high-profile personalities and organizations. They then use the spoofed accounts to start a thread or conversation. After that they start claiming that up to 30 bitcoins will be given back to their followers who will send 0.02-0.03 bitcoin to a specific wallet/address.
Users should secure their social media accounts and learn how to validate sources. Twitter, for instance, has security and privacy policies that swiftly flags and removes deceptive accounts or messages. Users can do the same by discriminating the source of social media content.
- Never Expose Your Private Key
The private key must remain secret at all the times because disclosing it to third parties is equal to giving them full control over the bitcoin which is being secured by that key. Back up of the private key should be maintained and protected from accidental loss, because once lost it cannot be recovered and the funds secured by it will be lost forever too.
- Watch out for Hype Marketing
An ICO is when someone offers investors some units of a new cryptocurrency or crypto-token. Naturally, this is an unregulated and unsafe activity all by itself.
An ICO might not be an absolute scam but its basic token might be mostly useless and not worth the paper on which its value is printed. Before investing in any ICO, reconsider why you are investing in the so-called cryptocurrency. Are you buying into the ICO because the marketing pitch makes you feel good? You should avoid investing in an ICO because it has strong business fundamentals or because the sales pitch is always in your face through emails, social media, or ads.
- Ponzi Scams
Ponzi scams are the assurance from websites that you can double your bitcoin quickly, or some similar bizarre claim. Ponzi sites may be difficult to spot, but they’re easy to figure out once you understand that the only way to double your money is to first send it to them.
Ponzi sites also usually have referral programs, so if you get your friends or relatives to sign up for the site by visiting your affiliate link, you may make a few cents. This is another red flag. A lot of times you will see on social media shared links with referrals within the URL. Usually, it will look something like this: domain.com/ponzi/?ref=12345
- Cloud Mining Scams
Cloud mining is joint mining has power, where people pool their funds together to rent Bitcoin mining machines. For legal operations, this works and can be lucrative. For scams, returns may be low or fictional. This can be a bit complex because not all cloud mining operations are scams. Some are completely genuine, however many are scams. Watch for these points before getting involved in this:
Does the cloud mining website use HTTPS? Did you find the website from a referral link on social media? Does the cloud mining operation give any insight of what pool they use to mine, or let you select the pool in which you want to direct your hashrate to?
As we have mentioned above, it’s best to trust your instincts, look for red flags and notify people (particularly beginners) to be cautious when looking into cloud mining.
We can’t stress enough the need to always do your own research. If an old king from a faraway land email you about a large legacy of cryptocurrency you SHOULD know what to do after reading this article. Stay safe out there!