The cryptocurrency has grown exceptionally over the past years. Due to its high efficiency, high security and self-imposed market cap. As it is, believe to be fully secure and safe but still where there is plenty of money there exist the scammers.
Whenever the scammers or hackers see the cryptocurrency ripe to pick a fraud simply pops up.The main cause of such scams is volatility, promises of large returns and much more. All these when combined results in great chance to fall for a scam.
As bitcoin is reaching great heights, therefore it is seeking more attention nowadays. In result attracting more scammers and hackers. The scammers are finding new ways for scamming investors and introducing new tactics every day.
Most of the time you might hear or see posts like this click here for bitcoin sports and anything similar to this and unfortunately most of the time it is just a scam. By taking under consideration, some common points one can keep itself save from such type of issues. For example, if you have never heard about an institute before you would not open up a bank account there. However, still, people become a victim of such bitcoin scams.
This article clearly explains the eight common bitcoin frauds and provide the solution on how to avoid them.
The 8 common scams to keep an eye on them are as follows:
1. Ponzi scheme
This is one of the most prominent types of fraud, whichlures the investor and provides profits to earlier investors through funds and other tactics. The new people investing money are actually profiting the previous ones and this cycle continues. The new investor thinks that this one is the procedure but actually, they are losing their money.
The examples of Ponzi scheme in bitcoin are endless. Every day a new member becomes a victim of it. The most usual thing they probably say to you is they promise to grow your business, as you invest your money, they just take it away.
2. Fake exchanges and wallets
In this type,you might hear of reputable exchange, but they are separating consumers from their earned cash. They usually entice users with promotional offers that appear so attractive, the first time you hear them.After you get yourself register in their companies, they start charging you with high fees and usually make it difficult to withdraw easily.
On the other side, some scammers simply create; apps for this purpose once you download in your smartphones it steal critical account details.
3. Pump and dump scam
Typically, in this form,the exchanges do not involve themselves but rather the exchanges of other particular exchange.These schemes are in use since long ago in the stockmarket.The business insider investigators investigate that these fraudstake place on two exchanges on particular that are Bittrex and Yobit.
4. Fraudulent Initial coin offer
As initially, many investors or people do not even know how ICO works so it makes the ground for scammers more clear to swindle people easily. It usually works on the principle that when a new cryptocurrency coin introduced and designed in such a way that it attracted plenty of traders.
This probably is not good, as introducing new coins would not get very far.Most people get duplicates of it and start selling fake tokens.
Malware proved to be an online weapon for the scammers. Itsconstruction is in such a way, that it getsaccess to your web account and can gather all the information and drain everything you have. Moreover, replace your address with the scammer’s address.
6. Mining Scam
This type of fraud works on the principle of cloud mining that allows mining cryptocurrencies without having to buy hardware that is the actual requirement to do this. Although it is very expensive too. This makes users to spend coins as rent server space at the affixed rate.
7. Giveaway Scam
This is commonly known, fraud, the scammers trap the investors by offering attractive things in addition, when investors registered for it by providing all the required information, and they simply access all the information and drain what an investor has.
8. Using old scams
There are plenty of new tactics nowadays but most of the expert scammers prefer to use the old-school frauds. The frauds they learned earlier prove to be more efficient and worthy for them. There are so many examples available in this respect. The most common one is a person receives a call or email claiming that you owe money and you will face some legal action if you will not transfer that money back. In this way, they drain money from you.
How to avoid
As bitcoin is extremely popular nowadays and the risks and frauds are increasing. For this purpose, there is a need to avoid them. Some of the ways to avoid frauds are as follows:
- Stick yourself to well-known exchanges.
- Avoid providing your personal information and account details to everyone.
- Do not pick up any random wallet from the app
- Do not trust unsolicited emails or calls.
- Avoid trusting any scheme who promise to return your money back.
- Do not open suspicious attachments.
- Wisely do research credentials of cryptocurrency before buying.
- Think for a while before getting started.
- Be wise and use common sense.
This article described some of the tricks and tactics that mostly scammers apply on investors for draining their money. Moreover, at the same time provides the solutions to avoid such types of situations to appear. One must be wise and careful before buying a cryptocurrency and be aware of the scammers as they spread widely with the increase of the trend of cryptocurrency like bitcoin.