Top 3 Most Common Cryptocurrency Scams
How To Avoid The Most Common Cryptocurrency Scams
If you are looking at investing in the bitcoin industry, you need to know the Top 3 most common cryptocurrency scams. Let’s take a look.
Over the past decade, the concept of cryptocurrency has emerged as a revolutionary form of tech and commerce alike. Through its use, millions of people can now securely make a litany of transactions without potentially revealing private financial information. Likewise, many investors have seen the opportunity that cryptocurrency markets provide.
Yet, despite increased regulation on this front, there are various cryptocurrency-related scams and schemes online that can trick those with good intentions. Knowing how to avoid multiple crypto-related schemes is a crucial tenet of investing wisely in these markets.
Here are a few pointers on Bitcoin scams and tips on how to avoid falling into the traps of cryptocurrency fraud.
1. Installing Software That’s Not Vetted
Many crypto scammers rely upon the masses’ complacency to accept any software, app, or program that claims to solve a problem at face value. If you are currently in possession of one or more cryptocurrencies stored in a local wallet, then it’s essential to be aware of every piece of software you install.
Less than reputable software applications may covertly possess lines of code that mine your computer for any evidence of cryptocurrencies stored there or elsewhere. Talk about dangerous, yet common cryptocurrency scams!
Additionally, these malware forms can also sniff out saved usernames and passwords that may compromise your investment accounts through which cryptocurrency is stored. Given the inherently decentralized nature of cryptocurrencies, it can be nearly impossible to recover any losses through these tactics once they’ve happened.
As such, be sure to use a vetted and verified trading platform. Looking for information on how to buy Bitcoin in Canada (or other cryptocurrencies) without immense risk is highly recommended.
2. Falling into the Trap of Mining Pools
Many entities promise the benefits of significant earnings via cryptocurrency thanks to crypto cloud mining or other similar processes. Unfortunately, this can be a considerable risk for those who don’t fully understand the concept.
Concerning cloud mining specifically, users generally rent server space in exchange for a set expectation of earnings per week, month, quarter, or year. However, like with most things in life, if the promises seem too good to be true, they likely are. No mining company can inherently guarantee a set amount of profit per period – let alone a specific amount.
Likewise, solutions that promise profits through your own hardware’s direct use can be a losing proposition. The chronic energy and wear placed on your computer and its GPU/CPU can prematurely cause the failure of these components – all the while, companies walk away with earned cryptocurrency thanks to your efforts. Even a modest return on investment for your efforts might not cancel out the damage done to your computer’s delicate components.
3. Mistaking Pump and Dump Schemes as “Investor” Knowledge
Groups of scammers sometimes band together to inflate the price of new or emerging cryptocurrencies artificially. This can lead to various headlines, press releases, and “investor” knowledge that promises great returns for those who invest early.
The only problem? The same people who inflated the currency’s price prematurely also know when to dump their holdings, leaving everyday investors holding the bag.
This practice is illegal in many countries now, but it doesn’t stop scammers. Be very wary of any promises of immediate gains through coordinated “pump and dumps.”
If it sounds too good to be true, then be wary. A variety of cryptocurrency scams are afoot every single day – only by using common sense and taking a reserved position on these actions can you safeguard your investments from potential theft and waste.
How To Report Common Cryptocurrency Scams:
Warn your family and online friends about these 3 most common cryptocurrency scams by sharing this article here on social media, using the buttons provided. You can also officially report all scammers to the FTC (Federal Trade Commission) using the link below:
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