The 5 types of Bitcoin Scam
Cryptocurrency scammers come in all shapes and sizes, with varying degrees of legitimacy. Scammers know that blockchain is still in its infancy, so they constantly change their approaches to entice people. No one is immune to this, and to help prevent people from falling victim, we’re describing the five most common Bitcoin scams.
Section 2: Con artists with Bitcoin
It’s no secret that digital currency is not without its frauds. Now that so many people are using it, scammers are keeping an eye on this untapped market. Even established companies fall victim to scams, which is why you should check their trustworthiness before giving out any personal information.
Section 3: Crypto Scams with a new twist
Cryptocurrencies and ICOs aren’t the only kinds of scams people have to worry about.
How to avoid bitcoin scams
More importantly, consider the structure of the cryptocurrency and the marketing around it before you sign on the dotted line. These are the four types of bitcoin scams that, in order from most common to least common, can damage your financial health.
Coin Drop Scam: Anyone can send you an email to your work or personal email address and request you to send some bitcoin to their account in exchange for an item of value. In the process, they’ll ask you to provide personal information, like your name and address, or even banking details.
Chatbot Scam: These bots are easy to spot because they’re designed to send you messages or open an account for you. Here’s the catch: once you get an email, and believe it or not, you’re then obligated to transfer money.
How to protect yourself from Bitcoin scams
It’s important to remember that scams and frauds will always be around, and while Bitcoin’s price surge means it’s more feasible to take risks, it doesn’t eliminate them. Before you invest money in a Bitcoin company, do your research to make sure it’s legitimate. Ask questions and check out the company’s policies. If the scam artists continue to run their scam, it’s best to let them go.
Bitcoin scams usually take several forms. One scam involves companies promising enormous returns on cryptocurrency investments. The scam artists claim to be selling digital coins or buying them from others, so there’s always a chance that it’s a scam. Other scams include pyramid schemes. In these types of schemes, people make money by recruiting other people to join their group and then recruiting more.
The good guys
If you are looking for a cryptocurrency, look for one backed by reputable founders who know their stuff. Early bitcoin adopters and cryptocurrency experts are becoming increasingly rare, which makes them even harder to verify. Consider following these bitcoin veterans on Twitter, who will help you learn about the latest digital currencies and will remind you to use common sense and caution when using cryptocurrencies.
Brave browser and Steemit
Because the early days of the internet were about sharing files, the internet was initially a low-cost, user-driven movement. Now, hackers have jumped in to hijack user-generated content (UGC), just as scammers have done in the financial world.
The bad guys
If you’re too trusting, you could fall victim to scammers who leverage the widespread distrust of cryptocurrencies. They usually ask for money in exchange for owning their bitcoin wallets, never give you the return promised on their digital currency, or never have a line of business (like a bank or other financial institution) on which to base their business.
Bitcoin scams come in all shapes and sizes. Don’t let anybody take advantage of you.
Here are some common types of crypto scams:
You get offered a way to own bitcoin quickly. They want you to deposit money into their digital wallet. Once you transfer it out, you’ll be able to sell it for real money. All the company needs to recover is 10 percent of your “investment.
Scammers that will give you a fake identity (this is not a scam)
If a company promises to send you a free bitcoin or ethereum, it’s unlikely that they actually own it. In these scenarios, hackers are likely to hack your account and claim your bitcoin or ethereum, or they will offer a free token in exchange for some personal information. Scammers may tell you that they have already sold your tokens to someone else. To sell it for you, they will need to know your personal information (bank account, phone number, etc.).
Other cases of fake identities include companies that won’t sell you the token in question, or require some sort of registration or processing fee. The goal of these phishing scams is to steal the funds from users, often through phishing (tricking someone in a website by pretending to be them).
Scammers that will help you gain access to the system through “hacking”
For instance, many crypto startups promote they have a team of experts who, when hacking the bitcoin network, discover weaknesses in the network and improve its security. But in reality, there’s nothing like that. “They are just not experts in crypto and have not looked at the bitcoin protocol closely enough to be able to make such a claim. In some cases, they may have a code base which doesn’t quite work as well as they claim. However, most don’t, and if you hire them, this will be obvious to you as you will be expected to do the testing,” explains Alexxander Kupreev, CEO and Founder of the Digiconomist blog.
“A company which promises you a free coin, or a certain amount of money, and is really looking to scam you, will simply never ever make a single bitcoin transaction.
Scammers that will offer you a service when in reality, they’re just taking your money
Cryptocurrency companies are notorious for offering services for free or with a small percentage up front. (There are a few exceptions, like EtherDelta.) There are also companies that claim to be Blockchain companies, but in reality, they are something else entirely. To stay safe, avoid working with anyone who says their product or service is free, and be on the lookout for exaggerated claims.
Fake “proof of stake” protocols
Scammers prey on the cryptocurrency craze, too. Bitcoin is all about blockchain and digital currency, but some people start to question the claims of certain protocols, especially when the company does not disclose any information.