It's unquestionable - Bitcoin has changed the concept of money forever.
For the first time ever, society is able to utilise a fair financial system that is incorruptible.
Acquiring Bitcoin is now easier than many expect and has become a safe haven because it is not part of the old way of doing things. The system resides within the Internet and is its own virtual ecosystem.
The price of Bitcoin has got larger and larger as time has gone on and now reaches the realms of billions of dollars. Many people are now able to realise the worth of Bitcoin. There is truly a tide shift going on, and learning about it can provide a wealth of opportunities.
However, this means that both good-intentioned people (and some not so good) have ideas of how Bitcoin could be used. The darker side of this means that there are people with ideas about scamming using fake Bitcoin opportunities.
Many scammers are looking to make money from cryptocurrency through selfish means. This usually works by targeting unprepared people who lose their own Bitcoin as a result.
The Nine Most Common Bitcoin Scams
The stratospheric rise of bitcoin over the last few years means that the mainstream has begun to become aware of it. A prime disadvantage of new investors putting money into bitcoin is that there is a lot more fraudulent activity and scams going on.
Hardware Wallet Theft
Users of bitcoin have to be on top of security and privacy when doing digital transactions. Bitcoin wallets can be stored on a physical device, making it more difficult for the coins inside to be taken.
However, it has been found that some of them may actually have weaknesses that allow hackers to get hold of all the currency stored inside of them.
Even though crypto is decentralised, most of them are bought and sold at exchanges. This does make coins for investing in easier to find, but there is no one regulating any of these exchanges.
There are a lot of fake exchanges that pop up one day and then completely disappear the next, taking all the money with them. Some re-emerge under a completely different name.
Fake Bitcoin Wallets
Distinguishing real from fake bitcoin wallets can be difficult. This is because they’re for storing bitcoin rather than buying or selling. There’s not so much to do with money as with what software you use.
Similar to fake bitcoin exchanges, you have to trust your instincts and keep an eye out for red flags. An easy marker of this is if the name of the website appears to resemble another reputable bitcoin wallet.
A very popular method that scammers use is to create fake websites that appear to be ICOs. This encourages users to put their coins into a wallet that is of course compromised.
In some circumstances, the ICOs themselves are to fault. Centra Tech was a venture into Blockchain that got celebrities to drive interest for them. It has now been sued in the US for misleading investors, lying about what they were offering and creating fake team members.
Fake ICOs can gain a lot of profit at other peoples expense due to clever marketing around a fake product. What this hinges on is those hoping to make a lot of money very quickly, only to realise their investment doesn’t exist.
Cloud Mining Schemes
Bitcoins can only be gained by mining, buying or exchanging. However, bitcoin mining in itself is very resource intensive. It takes a lot of processing power and electricity just to get a single coin.
There are many companies that exist that help people rent server space in order to mine bitcoins for a given rate. Lifetime contracts via cloud mining aim to keep server costs consistent while giving great returns.
However, the nature of bitcoin mining means that it only gets more difficult over time, which leads to smaller returns as time goes on.
In the digital realm, multi-level marketing schemes have been the reason for people losing money for quite some time. They always advertise fantastic offers for investors, and those that are naive take the bait.
In terms of bitcoin, this usually works by them asking for larger and larger donations. This is in exchange for higher profits. To not get caught out by this, you always have to make sure that you look at company fine print. You should make sure that all claims are authentic.
These schemes always tell participants they will get returns based on the number of people that they invite. This causes schemes to grow very quickly and virally, but rarely leaves investors with any kind of profit.
Ransomware is the type of malware that obstructs access to devices unless an amount of money is paid. In these cases, you should ask for guidance from computer professionals or someone that can remove the software rather than paying the money to unlock your device.
Ponzi schemes are notorious for telling you that your investment will double in the space of a night, or some other claim that is over exaggerated. This usually works by having the money sent to the person offering you the scheme.
Either that, or they are trying to drive the price up of their investment so they can sell the holdings for profit.
Phishing works by having someone trick you into believing a particular website is reputable. This can lead to you losing money via fake exchanges or getting malware on your computer that allows them to drain any funds you have.
Staying On Top Of Fake Bitcoin Opportunities
In order to stay away from fake bitcoin opportunities and scams, you need to make sure you don't jump on every opportunity you see. You should also make sure you can afford anything you invest. Cryptocurrency moves up and down a lot more than standard stocks.
Even if a coin exists now and is working very well, it may not be around in space of a month. Weigh up that you could lose everything before you start trading and possibly spread your investments across a range of coins.
You can also take time to make sure you know how to keep your coins secure, which we can show you how to do also.