Spot Bitcoin Scams

What is bitcoin?

There are several different types of cryptocurrencies — each with its own associated strengths and weaknesses. Most cryptocurrencies exist on the internet, meaning that they’re not physical objects but digital representations of those objects, like a coin. But there are also cryptocurrencies that are powered by software programs, and which aren’t affected by geographical location or internet speed.

Because there’s no central bank or banking system that issues cryptocurrency, you can’t send your coins across borders. And most cryptocurrencies have a fixed, fixed amount of digital currency that exists in a fixed form.

Bitcoin was the first cryptocurrency that came into existence. It’s got several features that make it attractive to cryptocurrency aficionados.

Scams and bitcoin

There are a number of scams that claim you can mine bitcoin with relatively simple equipment, or sell your service for bitcoin. Some startups are pushing for you to send cryptocurrency to their wallet (they may even require your bank account number to do it), but that’s illegal if you’re using your own money. The best thing to do if you’re asked to purchase cryptocurrency is to go directly to the companies themselves since those are usually the ones that offer the best protection. Another common scam is to fake a tech support page that won’t actually help you if you need it.

Phishing: scammers create fake websites in order to lure victims in.

How to tell if a crypto company is a scam

In the past, online swindles were about convincing victims to send money to phony bank accounts or transfer it into prepaid debit cards. But scammers have found innovative ways to cheat cryptocurrency investors. For example, “crypto hackers” are cropping up in more and more scams. These individuals impersonate someone in the cryptocurrency world and take money for hard-to-verify work on a project that’s then never completed. The hacker may try to sell the ICO to someone else for less than it’s worth and use the money to buy new cryptocurrencies, in a classic Ponzi scheme.

Hackers are also cropping up in the wild, which is one of the reasons you should be extra careful when buying an ICO in a public marketplace.

Dangerous examples of scams

Thieves can take your money with e-money transfers and apps that tell users they can avoid banks and wire transfer fees. Or they can plant malware on your computer and steal your identity.

Ways to keep yourself safe

Don’t invest anything you don’t understand, regardless of how great their marketing may be. It’s up to you to do your homework. Don’t feel you have to pay someone to guide you in the crypto space. The currency can be confusing and growing pains can be brutal. If you feel uneasy about anything you’re reading, contact a company directly. If they don’t reply within 24 hours, move on.