As the price of Bitcoin has risen sharply in the past few years, the number of scammers has grown exponentially. These schemes are not new, they have been developed since the beginning of the popularity of cryptocurrencies. In this article, we have introduced the most common types of scams that you should be aware of, so as not to fall into them.
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- Fake wallets
- Cloud mining scam
- Investment schemes
- Network Marketing on Cryptocurrency
- Fake exchangers and exchanges
- Phishing with bitcoins
- Cryptocurrency donations
- Fake wallets
Every user needs a wallet to store their coins and send or receive payments. There are four main types of wallets for Bitcoin and other cryptocurrencies, namely:
- hardware wallets,
- web wallets,
- desktop wallets,
- mobile wallets.
The scammers did not miss the high demand for mobile wallets and started making fake apps. The names of fake Bitcoin wallets are usually very similar to official and verified wallets (such as Coinbase or Mycelium). In some cases, fake Bitcoin wallets will display the same logo.
This tactical cryptocurrency scam confuses inexperienced users who think they are installing an official wallet recommended by everyone. Some scam wallets have been leaked to Apple and Android app stores disguised as real wallets.
Fraudulent scheme is as follows:
- the user downloads the wallet;
- uses it;
When the amount reaches a certain threshold, it will be withdrawn from the wallet.
The way to deal with it is very simple: download the wallet from a cryptocurrency website or a direct link from a verified wallet manufacturer.
Cloud mining scam
Responsible mining companies charge commissions to users in exchange for the power to mine Bitcoin (or other cryptocurrencies) on behalf of users. This allows people to get mining rewards without having to purchase or maintain expensive equipment.
However, this area is actually occupied by crooks. Fake cloud mining is a website that provides the purchase of electricity, but there will be no actual mining. Usually, these websites themselves will pay users within a period of time after issuing false contracts. Then, after a while, the company stopped paying and the user’s funds disappeared.
In this case, cloud mining is just a Ponzi scheme, in other words, a pyramid scheme, because users are attracted by the services of acquaintances while paying for funds. Once the number of new users dries up, scammers will cease their activities.
Examples of cloud mining scams include Hashinvest, Hashpoke, Cointellect, GAW Miners, and HashOcean. The latter two can be said to be the biggest cryptocurrency scams in the field in recent years. The owner of GAW Miners reportedly earned more than $10 million from investors. He convinced everyone that he has a lot of computing power, which led to a lot of sales of his fake cloud mining contracts.
To avoid falling victim to cloud mining scams, kindly conduct thorough research on the companies that provide these services and ensure that they conduct their business in a transparent manner. Comments and comments cannot be used as proof of any good cloud mining performance, as it may be part of guerrilla marketing and people interested in making money on the pyramid.
Investing in Bitcoin is another common cryptocurrency scam. These schemes are somewhat similar to cloud mining in that they also promise to make a profit and make small payments every day until all payments stop suddenly and the fraudster disappears with the investment funds. This also applies to the pyramid principle.
At first, these “investments” seemed very profitable because payments were made every day. Many users are reinvesting there, hoping to get a good return. However, when users try to withdraw their income, the problem arises. Before you find out, the company stops paying and users lose their investment.
If you decide to invest in any fund, make sure that the company is run by industry professionals. In addition, ensure that the proposed investment strategy is fully described and has common sense, and highlights risks and outlets. First of all, it is worth remembering that anyone who guarantees a high return on investment is lying, because the investment world has never been 100% certain.
Network Marketing on Cryptocurrency
Fake exchangers and exchanges
Bitcoin changers allow you to exchange one coin for another, as well as withdraw or deposit fiat currency. On a cryptocurrency exchange, you can speculate in currencies and buy altcoins at a better price during the transaction. There have been cases of fraudulent exchanges and exchanges in history.
Such exchanges require you to pay for the purchase of bitcoins. However, nothing was returned. These companies usually attract customers by lowering commissions, accepting more payment systems, and so on.
It is strongly recommended to only use trusted exchanges (but even the largest ones are not guaranteed to not crash). It is best to check new resources by entering a small amount of funds or take a guide on how to invest small amount by visiting btcloopholepro.com/in.
Phishing with bitcoins
One of the plans is to send emails to steal personal information. An email was sent to the victim stating that she had won Bitcoin. To collect coins, you need to enter your wallet (the form is in the body of the letter). The user just leaked his data to the scammer and cannot access his wallet because the data has been stolen.
Phishing scams are very common and have recently begun to gain attention in the cryptocurrency community. Always be careful to click on any links in the email that appear to be inaccurate, especially when you are viewing the email on your phone.
Unfortunately, crooks know how to use our emotions: greed (and then we promise high returns) or compassion.
There have been instances where scammers created false donation pages. For example, after the terrorist attack in Orlando, a fake donation page was created to encourage users to send cryptocurrency to help survivors.
Of course, this is not an exhaustive list. We have discussed how to choose an ICO and what a virus like Pete can do.