Over the years Bitcoin increased in popularity and reached billions in market capitalization. That atracts more and more people into it. The hype and the amount of money circulating is waht atracts scamers as well. They usually target newbies and unprepared people, that loose their money as a result. There is a wide range of cryptocurrency frauds ans scams and in this article we will discuss the most common of them.
Fake Crypto Exchanges
The first of the cryptocurrency frauds ans scams are fake exchanges. When you visit an exchange make make sure it has HTTPS security protocol and not HTTP. It means the traffic is sucure and encripted. Don’t trust exchanges that use HTTP without the S and are involved in money transactions. Stay away from adverts that say you could buy Bitcoin 5% under market value for example. That is nothing more than a marketing trick to make you visit their site. Some exchanges offer you to sell them Bitcoin for PayPal. You will usually see a form to submit your PayPal email, and they will give you QR code where you have to send the Bitcoins. Your money will usually not arrive. Those sites offten disappear fast, just to appear under a new domain later.
Ponzi scams will promise you that you will dobble you coins in a short period of time. Ofcourse the trick is that you have to send them your money first. Other sites will promise you that they will digg for you a certain amount of Bitcoin for 15 minutes or so, because they’ve discovered a loophole in the Blockchain. Of course they give away those Bitcoins o people because of a “good heart”:). You just have to send them certain amount(usually several dollars) for the transaction fees. That is also a huge warning sign for a fraud.
Cloud mining scams
First let us say that not all cloud mining services are cryptocurrency frauds ans scams. Some of them are legit, but people, especially newbies should be aware that there are a lot of sacm services. In cloud mining people combine their funds to buy mining machines. This can be totally legit and profitable, but in scams the profits are too low, or there is no profit at all. To be sure check if the site is HTTPS or HTTP. See if the site provides information about the pool they mine in or they let you choose the pool yourself. Those are just some of the things to look for.
Phishing is usually done via e-mail or advertisement. Those people want you to believe they are a solid and trusted company so you visit a fake site. As a result you will get malware or get tricked into a fake sale. The best thing to do with e-mails is to visit the site trough the browser, and not throught the hyperlink in the e-mail. May be hackers have your e-mail by some database hack, or they have it throught the black market. Also keep in mind that e-mails can be spoofed, so even if the sender looks legit, there is still danger from phishing. Sometimes fake advertisements can appear as the top search in the search engine for specific keywords. In that case the site you visit may be phishing scam and turn out to be a fake wallet. For safety reasons better type the web address in your browser.
Fake are another of the cryptocurrency frauds ans scams. These wallets usually have to do with the software you download. They aim to infect your computer and steel your private keys or passwords. Check if the site has HTTPS or HTTP prorocol. Also check if the wallet tries to imitate the name of a popular cryptocurrency wallet. If you download software check the site for malware. A good site to do that is VirusTotal. In general you can never be too sure about your safety. It is for the best to ask people around the net for further information. You can do that on the Bitcoin Forum or Bitcoin Reddit.