Interested in learning more about cryptocurrency scams? Here’s How To Safeguard Your Assets

Interested in learning more about cryptocurrency scams? Here’s How To Safeguard Your Assets

 

Cryptocurrency is a digital currency that only exists online. Unless you utilise a service that allows you to exchange cryptocurrencies for a physical token, there is no actual coin or bill. Without using an intermediary such as a bank, you usually exchange cryptocurrencies with someone online, using your phone or computer. Although Bitcoin and Ether are well-known cryptocurrencies, there are numerous more, new ones are created regularly.

What are the most common ways that people use cryptocurrency?

People utilise cryptocurrency for various reasons, including immediate payments, avoiding transaction fees charged by traditional institutions, and anonymity. Others invest in cryptocurrencies in the hopes of seeing their value rise.

What is the best way to obtain cryptocurrency?

Cryptocurrency can be purchased using an online trading platform. Some people make money with cryptocurrencies through a laborious process known as “mine,” which necessitates using advanced computer equipment to solve challenging math puzzles.

What do you do with your cryptocurrencies, and where do you keep them?

A digital wallet, online, on your computer, or an external hard drive, is where cryptocurrency is kept. Suppose something unexpected happens, such as your online exchange platform going out of business, sending bitcoin to the wrong person, forgetting your digital wallet password, or having your digital wallet stolen or compromised. In that case, you’ll likely find that no one can help you recover your cash. And, because bitcoin is often transferred without an intermediary such as a bank, there is usually no one to turn to if you have an issue.

What distinguishes cryptocurrency from US dollars?

Cryptocurrency and traditional currencies have significant distinctions.

Governments do not back cryptocurrency accounts, and The government does not guarantee cryptocurrency accounts in the same way bank accounts are. If you keep cryptocurrencies with a third-party company and it goes out of business or is hacked, the government is under no responsibility to help you recover your funds.

The value of a cryptocurrency fluctuates all the time. The value of a cryptocurrency can fluctuate dramatically, even hourly. Many variables influence this, including supply and demand. A thousand-dollar investment now could be worth only a few hundred dollars tomorrow. And there’s no guarantee that the value will rise again if it falls.

Using Cryptocurrency to Make Payments-

If you’re considering paying using cryptocurrencies, keep in mind that it’s not the same as paying with a credit card or other traditional ways.

Payments made with cryptocurrency are not protected by law. If something goes wrong with your credit or debit card, you are legally protected. If you need to dispute a purchase, for example, your credit card company has a procedure in place to assist you in getting your money back. Cryptocurrencies, on the other hand, rarely do.

Payments made with cryptocurrency are rarely reversed. Once you’ve made a cryptocurrency payment, the only way to receive your money back is if the person you paid pays it back to you. Know the vendor’s reputation, where the seller is situated, and contact someone if there is a problem before buying something with cryptocurrency. Before you pay, double-check these details by performing some research.

Some information about your transactions may likely be made public. Cryptocurrency transactions are often referred to be “anonymous.” But the truth is more complicated. Some cryptocurrencies use a public ledger called a “blockchain” to record transaction data. This is a general list of all bitcoin transactions, both payment and reception. Depending on the cryptocurrency, details like the transaction value and the sender’s and recipient’s wallet addresses may be uploaded to the blockchain.

A wallet address is a long string of numbers and letters associated with your electronic wallet. Although you can register your digital wallet under a false identity, transaction and wallet information can be used to identify the people engaged in a single trade. When you buy something from a vendor that gathers additional information about you, such as your mailing address, that information can potentially be used to identify you.

 

How To Stay Away From Cryptocurrency Scams-

Scammers are always thinking of new methods to steal your cryptocurrency. Anyone who demands payment in bitcoin is most likely a scam artist. A con artist is someone who advises paying with a wire transfer, gift card, or bitcoin. If you pay, you nearly never get your money back, and that’s exactly what the con artists hope for. There are a few bitcoin scams to be aware of.

 

Scams involving investments and business opportunities-

Some companies promise that you may make a lot of money quickly and attain financial freedom.

Some con artists say that in order to have the pleasure of attracting others into a programme, you must pay in cryptocurrency. They claim that you’ll be rewarded with cryptocurrency for your efforts if you do. They claim that the more bitcoin you pay, the more money you earn. All of these claims and guarantees, however, are false.

Some con artists begin by making unsolicited offers from so-called “investment managers.” These con artists claim that if you give them the bitcoin you purchased, they can help you grow your money. However, if you log in to the “investment account” they set up for you, you’ll discover that you can only withdraw your money if you pay fees.

Unsolicited job offers to assist recruit cryptocurrency investors, sell cryptocurrency, mine cryptocurrency, or convert cash to bitcoin have been sent by some scammers.

Some con artists post fake job postings on job boards. They’ll promise you a job (in exchange for a charge) but then take your money or personal information.

 

Look for claims like these to assist you in identifying the businesses and individuals to avoid:

Scammers promise that you will profit. It’s a con if they guarantee you’ll make money. Even if it is endorsed by a celebrity or there are testimonials. (Those are simple to make.)

Scammers promise large sums of money with a high probability of success. Nobody can promise a specific return, such as doubling your money, much less in a short period.

Scammers claim to be able to provide you with free money, be in cash or cryptocurrency. However, free money promises are usually deceptive.

They further make statements with no supporting evidence or justifications. Savvy business people want to know how their money is being invested and where it is going. And brilliant investment counsellors are eager to share their knowledge.

Check it out before you invest. On the internet, look for the company’s and cryptocurrency’s names, as well as words like “review,” “scam,” or “complaint.” Take a peek at what others are saying. Learn about other common investment scams as well. Also, learn about other frequent investment swindles.

Emails of extortion-

Scammers frequently send emails claiming to have embarrassing or revealing images, videos, or personal information about the recipient. Then they threaten to publish it unless you pay in cryptocurrencies. This is blackmail and an attempt at illegal extortion, and it’s not a smart idea. It should be reported to the FBI as soon as possible.

They’ll suggest it’ll be in cash or cryptocurrency, but free money promises are usually deceptive.

Scammers make strong claims with no proof or arguments to back them up. Savvy business people want to know where their money is going and how it is being invested. And wise financial advisors are eager to share their expertise.

Before you invest, could you take a look at it? Check for the organization and cryptocurrencies name, and also phrases like “review,” “scam,” and “complaint” on the web. Take a look at what others have said and what they’ve written about.

 

Social Media Scam-

Scammers routinely send emails to victims claiming to have embarrassing or revealing photographs, videos, or personal information. They then threaten to make it public unless you pay in cryptocurrency. It isn’t a good plan, and this is blackmail and extortion on a criminal scale. It should be reported to the FBI as soon as possible. Suppose the online crypto sector continues to draw new users at an unprecedented rate.

In that case, industry analysts predict that hacking incidents will rise in the following days and weeks. Between January and July of this year, large cryptocurrency thefts, hacks, and fraud are estimated to have cost more than $650 million. Many more are still to be reported due to various factors, including a lack of sufficient technological understanding.

Cryptocurrency is vulnerable to fraud and theft, just like any other enterprise. On the other hand, experts advise investors to comprehend the risks associated with digital assets thoroughly. The best thing a trader can do to protect their capital is to become aware of potential hazards and typical blunders committed by others.

Here are some pointers:

1) Conduct comprehensive research.

Investors should devote time to thoroughly investigating the cryptocurrency or other digital asset they wish to invest in whenever possible. They might begin by visiting the official website of the cryptocurrency initiative. Find out more about the company’s founders, developers, and current backers. Find out where you can purchase the project. These should provide an early sense of whether or not the project is viable.

2) Fraudulent websites

Do not be fooled by fake websites. A surprising number of imposter websites that look just like the official website are created regularly. Amateur investors frequently fail to distinguish between legitimate and phoney investments. If you’re unsure, ask individuals who have worked in the sector for a while. Emails that are phishing should be avoided.

3) Mobile apps that aren’t real

Another line of defence is only to download crypto trading or exchange apps from trusted sites. Scammers frequently use bogus applications to deceive investors. Even though phoney apps are swiftly recognised and banned, they are not going away anytime soon. Look for glaring spelling errors in the copy of the app’s name. Consider whether the branding is fragile or whether the logo is wrong.

4) Be aware of smart contracts.

Intelligent contracts are codes on the blockchain that carry out a set of instructions. Although they are technical, they usually aid in the understanding of a crypto project’s overall potential. There could be flaws in the project if there is a problem with the smart contract.

5) Make sure your wallet is secure.

Finally, take care of your pocketbook. Every wallet has two keys: a private and a public key. Under no circumstances should the private key be shared with the public. Wallets, however, have hazards, and cold wallets are usually the safest way to keep private keys.

Edited and Proofread by Ashlyn Joy