4 Common Bitcoin Scams and How to Avoid Them

4 Common Bitcoin Scams and How to Avoid Them
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  • Regardless of whether you wish to trade or mine BTC or other cryptocurrencies, the world you are getting yourself into is both complex and exciting. The difference between winning and losing lies somewhere between extensive research and sheer luck which is why it attracts so many people, as well as the fact that cryptocurrencies aren’t controlled by any banking system.

    While some variables, such as the mining difficulty and BTC value, you just can’t control, what you can exert control over are the coins you acquired by trading or mining since just as with the earnings from your full-time job, there are people who would want to get their hands on them. Here are examples of 4 most common scams with BTC, the dominating cryptocurrency, and some pieces of advice on how to avoid them.

    Be careful of phishing

    This term is not reserved solely for the world of cryptocurrency but those rewards can be the most lucrative ones. ‘Phishing’ resembles ‘fishing’ for a reason: the idea behind it is that bait is dangled in front of you and you are expected to grab it – but, don’t! Of course, it is easier said than done but the more you know about it, the more careful you will be.

    You receive an alarming looking email from wallet provider, crypto exchange or cloud mining company whose services you are using. It states that you urgently have to update your payment information, that someone has just logged into your account or that your email’s deactivation is in the process. You then click on the link from the email that supposedly leads you to that website and once you enter your login data, the con artists have everything they need to strip you of your BTC.

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    What you can do to protect yourself: don’t click on the link from the email and always double-check the URL since the difference from the real website could be as small as a dash. It’s better to type in the URL on your own or to keep it somewhere on your computer ready to be copy-pasted. And also, never disclose your private key, no matter in which manner it is asked from you.

    Beware of fake wallets and exchange markets

    Falling for a fake wallet provider can happen not only as a phishing trick for the present users but new users can be scammed as well. For instance, there has been a popular case of a scam involving BTC wallet Electrum (real) and Electrum Pro (scam). The scammers bought a .com domain, while the original wallet has a .org one so many newcomers were tricked because Electrum Pro appeared first on the search result list when they google for Electrum and because they claimed that they were an upgraded version of Electrum. When they took enough BTC, they shut down their website and even accused Electrum of ruining their reputation.

    When it comes to exchange markets, the situation is somewhat similar in the sense that their websites look reputable and their offer amazing – even too good to be true – and then once you transfer your coins with a desire to trade them, you suddenly realize that the fee is absurdly big or that you no longer have the control over your BTC or other coins.

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    What you can do to protect yourself: Research, research, research. Dig through and post questions on different channels and always be vary of new wallet providers or exchange markets, no matter how reputable they may appear. Even for someone more experienced in the crypto community, it is better to stick with well-known wallets and exchanges.

    Research the cloud mining companies

    Users who are novices in the cryptocurrency world often opt for cloud mining companies because it is easier to invest your money and wait for returns without having to research about cryptocurrency mining in depth. The appeal also lies in the promise of gaining a portion of BTC each day and not thinking about anything else apart from setting up a wallet on your profile to which the payouts will be sent.

    However, it is sometimes difficult to assess which cloud mining company is legitimate or not, especially when the schemes are so elaborate that they can even send payouts for months only to stop them suddenly and disappear forever. You should always check certain things before you send them a payment, such as whether their website has a registered domain name, and look for legitimate reviews from other users.

    What you can do to protect yourself: Search for cloud mining companies that have been around for at least 2 years and for which it is confirmed that they send payouts regularly to their users. Alternatively, if you are a true enthusiast, you can purchase a reliable Antminer and start crypto mining by yourself and if you decide that mining is not for you, you can always sell the equipment while with a cloud mining company, there is little chance of backing out of a contract.

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    Double-check for crypto-related malware

    Malware has been around for some time now but since the nature of cryptocurrencies is complex for an average computer user, crypto-related malware has become a very efficient method stealing traded or mined BTC from people from all over the world. The trick is that the malware can run in the background without you noticing that it is running so it goes without saying that you should be careful about what you click across different websites.

    There is a number of things these malware viruses are designed for, so some will infect your PC or laptop with a crypto miner, while others will search for information for accessing your wallet and transferring funds elsewhere or even replace your wallet address with that of a scammer. Since reversing a BTC transaction is virtually impossible, you can see how much of a threat this change poses.

    What you can do to protect yourself: Be extra careful about software that you download and install, and make sure it is from a reputable source. This sounds like a redundant piece of advice but never forget the part of you which presses ‘I agree’ without actually reading the terms and conditions. Also, don’t open attachments that seem suspicious and most importantly, update your antivirus software regularly.

    If you are on the amazing ride of cryptocurrencies, don’t forget to exercise precaution while you are having fun and earning. Make sure you research and double-check everything in detail before any activity and to protect your computer with reliable antivirus software.

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