5 Common Bitcoin scams to avoid

In this digital era, falling prey to numerous cryptocurrency fraudulent schemes is as easy as it can get. To address this issue, today, we discuss five common Bitcoin scams to avoid!

6 September, AtoZ Markets Bitcoin price is volatile and unpredictable, but there is something about this technology that attracts a lot of people into this market. In December 2017, the price of one Bitcoin had hit the record high around $20,000. Since then, the price has dropped significantly; yet, people have a lot of belief that it can achieve even higher levels.

5 Common Bitcoin scams to avoid

While the cryptocurrency market is quite lively and attractive for investors. It also gains attention from the cybercriminals’ side. In the last year, millions of dollars worth of cryptocurrencies have been lost to hackers and scammers. These people also want to profit from a cryptocurrency boom, setting up various fraudulent schemes to lure in their victims.

How not to fall prey to the cybercriminals, who are after your crypto assets?

In this article, we will discuss five common Bitcoin scams to avoid. We will discuss the most frequently used schemes and explain how to spot them right away.

Cloud Mining Scams

It starts with cloud mining scams. It is worth to note that this point can be quite tricky since not all cloud mining operations are fraudulent. Some of them are legal, yet, many of them are scams. Therefore, it is recommended to exercise extreme caution when dealing with any cloud mining operation.

Cloud mining is sharing mining hash power, so users pool their funds together to rent Bitcoin mining machines. In the case of legitimate cloud mining, this can be very profitable. However, if you deal with a scam, returns might be close to zero or even non-existent.

How to spot such a scam?

Pay attention to the website itself – does it use HTTPS? Did you find the site from some referral link on social media? Does the website provide any information into what pool they use to min? Or does it let you choose the pool you want to direct your hash rate to?

If you feel that there is something suspicious about the way the website operates, it is probably not a good idea to work with it. Legitimate and reliable cloud mining operators usually provide all the necessary details and do not try to cover up any data.

Ponzi Scams

Moving on, another popular fraudulent scheme used by scammers in the crypto world is a Ponzi scheme. Ponzi scheme operators promise users to “double” their Bitcoins in no time, as they are also using a similar approach to lure their victims.

This type of scam might be hard to identify, but they are easy to figure out once you understand the way they work. One simple principle here is that they propose that you send them your cryptocurrency holdings, and then they say they can “double” them. However, in the majority of such cases, you will never see your Bitcoins again.

These schemes usually feature referral programs, meaning that if you get others to take part and sign up for this website, you can make some profits. This appears as yet another warning sign that you are about to be tricked into something fishy.

Fake Exchanges

Another widespread Bitcoin scam is a fake Bitcoin exchange setup. It happens that on social media, you can see a link saying something like “Buy BTC for 5% under market value here!” This is a marketing move that is used by the cybercriminals attempting to get you to visit their fake Bitcoin exchange.

When you visit any cryptocurrency exchange website, you need to make sure that they use HTTPS security protocol and not HTTP. HTTPS security protocol shows that the web traffic of a website is secured and encrypted.

Another red flag to look out for are the Bitcoin exchanges that offer PayPal funding option. These websites usually present a web form where you need to enter your PayPal details. After you hit submit, you will see a QR code for sending your Bitcoins to this exchange. However, it never happens.

Also, fake Bitcoin exchanges are usually operating for a short time – they appear one day, and they are gone the next.

Fake Wallets

Fake Bitcoin wallets are as popular as fraudulent Bitcoin exchanges, yet spotting them might be a little trickier. Usually, fake Bitcoin wallets are scams for malware that infect your device to steal your login details or private keys.

To identify a fake Bitcoin wallet, visit its website. And again, take a look at the security protocol they use – if it says HTTP, it is most probably a scam. Also, check if the wallet is using a name. That is trying to mimic that of another reliable and popular Bitcoin wallet.

One of the best ways to approach it is to ask for guidance. Ask experienced people on forums what they think about a particular wallet and if they have had any experience with it.

Phishing Scams

The last but not least, come phishing scams. Phishing refers to the practice when somebody tries to make you believe that they are a legitimate and trusted company by having you visit a fake website.

Usually, this type of scammers reach out to you via email or through a fake web ad. You might end up going to their website and either infect your device with malware or lose your Bitcoins via a fake sale.

In this case, it is vital not to believe every email you receive. You might receive the email from a wallet or exchange you already use, but the scammers might copy the name and even the website address almost letter to letter.

Do not click on any hyperlinks or open any attachments before you make sure you are reading the email from the genuine company. Moreover, pay attention to the sender’s email, as this might give you an idea of whether it is a scam or not.

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