Common Bitcoin Scams You Should Know
Scam and fraud have become very rampant nowadays in the computer world. Scammers do not rest, they keep finding vulnerable individuals to extort. Anyone can be scammed, especially people looking for means to get rich quick, when they see mouth-watering offers, they do not think about it before venturing into it, and this is why many end up being scammed.
Bitcoin scam is now a prevalent fraud that everyone needs to be aware of and know how to avoid, in order to prevent being scammed. Bitcoin scam is now very common because of the recent tremendous increase in the value of bitcoin. The value of one bitcoin has passed $16,000 in the market, and it is predicted by some cryptocurrency experts that one bitcoin may be equal to $1,000,000 in 2020.
Here are five of the most common bitcoin scams and how to avoid them.
Fake Bitcoin Wallets
Bitcoin wallets are where bitcoins are held and platforms where transactions take place with ease. Wallets can be of different forms, there are web wallets and mobile wallets. Scammers have been creating mobile wallets that look similar to the original wallets of some websites. The fake wallets usually have names that are very similar to the original wallets, the logos even look alike so people won’t easily detect if they are not extra careful. People who are not careful and those that don’t take instructions usually fall for this scam.
To avoid falling for this scam, someone has to make sure to use only the genuine sites for logging in. Make sure the URL starts with “HTTPS” and not “HTTP”, then look for the lock sign with “secure” before the URL.
2. Phishing Scam
Phishing is a method used by scammers to obtain sensitive information from unsuspecting individuals, it is usually done by sending emails to people, disguising as a reputable organization. The common method used for bitcoin phishing scam is usually when emails are sent to targeted people. They are told they have earned some bitcoins and before claiming, they have to log in to their wallets through the site. (People who like free things and the greedy ones usually fall for this). After they have logged in to the “disguised” site with their wallet details, the information is stolen by the scammers.
This scam is best avoided by staying away from malicious emails claiming an individual has won some bitcoins. Only attend to emails sent by the real organization, and make sure to confirm from customer support if you are not sure of the mail.
3. Bitcoin Cloud Mining Scam:
Bitcoin cloud mining is the process of bitcoin mining where remote data centres are used with shared processing power, miners are rewarded with bitcoins after. Cloud mining enables people to mine bitcoins without having to buy the costly bitcoin miner hardware. Bitcoin cloud mining scam is done when some websites pose as cloud mining service providers, so they ask users to register and subscribe to their mining service (with high amount). After the users register on the site with bitcoins, they are initially given bitcoins (which is lesser than the amount used for the subscription) for a period of time, after that time, they stop paying them and they run away with their bitcoins.
The best way to avoid this cloud mining scam is to ensure you make a thorough research on any cloud mining service provider you wish to use, and check the ratings from trusted sites.
4. Bitcoin Investment Schemes
Bitcoin investment scheme is another way scammers use to get people. Just like every investment, they promise to give returns on the investments. It is somewhat similar to cloud mining scam. When people invest, they actually start getting the returns at the specified time for some period of time. After noticing they are paying well, this will prompt the people to reinvest and to bring other people in for them to get more funds. When it gets to the period when the investment schemes are unable to pay out again, they will find a way to make people unable to get their invested funds back. They may either shut the website down or make people encounter problems with their account.
It is advisable to make sure you study any investment plan before taking time to invest in it, most of these bitcoin investment schemes are scams.
5. MLM/Ponzi Schemes:
There are some multi-level marketing (actually Ponzi) schemes that do not have any product they sell or any service they offer. They only tell people they will pay out bitcoins when people refer others to their website. They entice people by claiming they will pay high value of bitcoins for simply referring others. They are not to be believed, they are just Ponzi schemes. They might actually pay out a reasonable amount of bitcoins in the first place (with part of the money got from new members’ registration). After they’ve got what they want, they eventually shut down. People that are too greedy usually fall for this scam too.
Multi-Level Marketing programs usually have products they sell, any MLM that doesn’t have a product or service they provide but only promise to pay through referrals are scams. The best thing to do to avoid falling for this is not to take part in any MLM that promises high returns for just referring.
There are some other bitcoin scams apart from those mentioned above. Another common one you need to be aware of is fake exchange scams. Here, fake payments are made for bitcoin on the trading platforms, which allows the scammers take the bitcoins without actually paying. It is advisable to use only trusted exchange platforms for bitcoin exchange.
In conclusion, bitcoin scam is best avoided by ensuring you make adequate and proper research about any process involving bitcoins, as scammers have been using the fast-rising rate and popularity of bitcoin as an avenue to dupe newbies and unsuspecting people.