Scams In The Cryptocurrency World And How to Avoid Them
Whether you’re an experienced user or a total newbie in the world of cryptocurrencies, you need to be aware of a number of different scams in this area. When you know what they are, you’re going to have a better chance of never running into one. Let’s take a look at the main forms of crypto scams and how to stop them.
Fraudulent ICOs & Pyramids
The vast majority of all tokens that have ever been released have been found to be scams. This may deter many people from investing in any kind of token sales, but the scams definitely do not reflect the industry as a whole. When you decide to participate in an ICO or something similar, you need to make sure that you are participating in a trustworthy venture with a solid foundation, a group of real people working actively to accomplish their goals, and that this is not a pyramid scheme.
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One of the well known examples of a cryptocurrency pyramid scheme is Bitconnect. It had achieved great popularity while providing enormous payouts to its users, but when the tide turned the coin quickly lost its value. It has taught investors an important lesson in the ICO industry, and we recommend that you avoid these ventures.
Scambots & Cryptocurrency Generators
Another type of scam that is commonly found on social media platforms like Twitter or Instagram is a scambot. Accounts that claim to be like popular media personalities contact followers and give them a potentially lucrative deal. In exchange for a number of coins or tokens, they promise to give away much more shortly.
In addition, there are other bots, such as Bitcoin generators, which ask users to borrow them some coins to earn interest. No matter how simple these generators may be, most people are fooled into losing their funds this way, too. Do not share your private keys with anyone, and note that coins can not be returned once they have been transferred.
Phishing Sites & Fake Wallets
As with all other forms of digital software, cryptocurrency users are vulnerable to phishing attacks. In this scam, malicious actors masquerading as trustworthy providers and institutions steal user data by tricking them into sharing their passwords, keys, and credit card information with a familiar interface. We can appear anywhere on the internet or in your mailbox, so always double-check the URL and other service credential before sending any personal information.
False wallets are some of the popular phishing sites around among cryptocurrency projects. Once a client submits to a fake wallet their private keys, they will immediately lose their property. You should therefore also test whether the wallet you use is legitimate by carefully examining the public records and reaching out to the internet.
Exit Scams
And eventually, sometimes with the money of the users, which is called an exit scam, a proven cryptocurrency exchange or a wallet simply disappears. It is vital to keep your resources in a safe wallet and never share your private keys in order to avoid these circumstances. Nothing can happen to your property as long as no one has access to your keys.
Constant Vigilance!
As you may have observed, cryptocurrency scams are so interconnected that it’s hard to classify them. But it does not change the fact that the market is moving out of its infancy at the moment, and there is still a lot of work to be done in both development and education. Stay positive, but when handling your crypto, always keep a clear mind. A little awareness is going to go a long way.
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