Cryptocurrencies and blockchains are gaining more traction but there is an increasing problem with the issue of frauds and scammers. This article sheds light on the most common Bitcoin scams and how to avoid them.
Most Common Bitcoin Scams
Here are some of the most common types of Bitcoin scams:
Scammers may create a fake crypto exchange that may appear like that real site or application. But in reality, it is only looks like the original site. If the consumers try to log in or create a new account they can end up transferring their crypto reserves or bank details to fraudsters.
Therefore, the best way to avoid this type of scam is to ensure that authenticity of sites or application from the app store. In most cases, running a simple online search will reveal if there are more than one sites or applications listed.
ICOs and airdrops are plagued with regulatory issues. However, there are many cases where scammers can mint fake tokens and create hype about fake token giveaways. These types of giveaways are conditioned with sending a little bit of cryptocurrencies to their scammer wallets.
However, if anyone falls for the trick, they are warranted to never their funds again as there is no way to reverse transactions on decentralized crypto wallets.
It is not a good idea to send anyone any amount of tokens without any binding contract or smart contract to ensure the compliance of trade from the other side.
Phishing attacks are a way for scammers to collect personal information from their targets. They can use social media platforms or other methods such as emails or even malware to steal the private keys or other sensitive information that allow them to break in the user wallets and siphon off funds.
In these instances, the scammers will try to impersonate already existing personalities or pose as an authority or services provider to fool their victims. Phishing attacks can be very convincing and usually try to pressurize their victims to not ask any questions.
It is best to remain calm and check from the real services provider and law enforcement authorities before disclosing any type of personal information on your system.
One of the most dangerous malware used by scammers is copy-and-paste viruses. These malicious programs can steal any information available on the clipboard. This information is sent to scammer who can filter it to isolate the necessary financial information for their investors.
One of the best ways to avoid this type of attack is to use quality antivirus and block the installment options on your browser settings. When using desktop applications, it is best to install antivirus extensions.
Ponzi and Pyramid Schemes
Ponzi schemes are the ones that are perpetrated by the scammers by the way of offering massive and unrealistic returns on crypto investments. The people who are not well-versed about the industry can end up falling for this trick. On the other hand, Ponzi schemes are a multi-level marketing bluff.
The scammers recruit more people to invest money with a condition to recruit more people. The best way to deal with both these types of scams is to conduct research about the claims that are made by scammers before investing any money or sharing any personal information with them.
Ransomware is also an intrusive computer virus that can lock the user from accessing their files and other information present on their mobile phone and PCs. One of the best ways to deal with this type of viruses is to install a useful anti-virus on the system. Furthermore, it is best to install applications only from authenticated sources.
Let the operating system scan any links or sites before opening them. Another great method to stay safe is to make a backup of important data on a cold storage or distributed server in case the original source is compromised.
Scammers are part and parcel of the financial markets. It is not possible to exist in the crypto sector without facing off against a few scammers every now and then. Rather than avoiding trading, it is best for investors to stay updated about the latest methods of scamming and adopt the best precautionary measures.