Bitcoin has been a revolution since the day one of its launch in the digital world and a new source of the digital system has opened up! However, not everyone is okay with the digital coin as there is a huge probability that it may end up as a scam business! After being in the industry for a good amount of time, Epixel MLM Solutions made some digging and came up with a useful article that creates awareness about Bitcoin scams. One must be aware of such facts and here we’ll explain about 7 Bitcoin scams you must know about.
The main motto or aim of the scam is to steal money from people around the world by means of fake promises and programs. This article will help you to ring a bell and the so-called “false alarm” must lid up! Scammers usually take advantage of the people’s unawareness, and make them fall into the trap. Let’s have a look on the scam list,
1 – Unverified Bitcoin exchange platform scam
Exchange platform is a multi-currency cross-linked stage where one cryptocurrency is exchanged for another or fiat-cryptocurrency and vice versa. A Bitcoin holder can exchange his/her holding BTC and exchange it. Here you can buy Bitcoins also and add in the wallet. Due to this reason, a scam may result you in losing a large amount of money.
Some exchange may offer you more profit or discounts and you will easily fall for such mesmerizing acts. The security threat is an issue that may collapse the entire system single-handedly. Let us give you the instance where such scam occurred in the past period of time – “Mt. Gox disaster!”
Back in 2010, when Jed McCaleb started an exchange platform in Japan, it became an interesting source of income in the digital world. Here you can buy, and sell Bitcoin and by 2013-’14, about 70% of Bitcoin is in circulation. A security breach changed the fortune of the exchange platform and by February 2014, Mt. Gox has suspended the trading and become a victim of bankrupt. The platform was shut down, and liquidation wiped out it completely. Liquidation is the final step of an organization, and its dead meat after this process. The team has redistributed all the assets and properties, and about 85000 Bitcoins got stoled in this allegation.
Another theory suggests that BTC where lost due to the transaction to the invalid addresses. Also after the breaching issues, BTC value dropped down to the bottom. This failure is considered one of the biggest scams of the era. Lots and lots have lost their money due to this epic scam. A solution is made from the court by appointing an official to look after the debt.
How to avoid BTC exchange scams?
- Check the authority of the exchange and their exchange procedures closely.
- The promotions to make you rich – kind of promises are to be noted.
- Regulations – this part carried a huge role and if not avoid it.
- The exchange rates must be double checked and make a comparative study.
- How to deposit the money and the withdrawal norms need to work in parallel without any complexities.
- Before making the trading in never-heard-before exchange platforms, make sure they are genuine but not fake/scam.
So beware of such situations and make sure you have made a throughout analysis before making the payment or trade in such platform.
2 – Ponzi business – BTC scams
A business that deals through online methods is always a great concern, and this sort of business needs to follow several things. Usually, a business that runs with a digital currency tends to fall under the scam category. Bitcoin after its rise in the value has offered immense business attraction, and several initiatives have been put forward after it.
When such valuable asset combines with a well-recommended business platform then, it’s a huge opportunity. And on the other side of the coin, a dark scenario opens up! A BTC related MLM schemes are already working in progress, and people really enjoy the opportunity. If such platforms offer or promise you with a high return scheme, just don’t fall for it directly. Investors fall for such Ponzi business scams and lose a fortune, without a recovering point. There is no return from that point, recently in a BTC scam; investors have lost about $300 million.
A pyramid model business scheme was introduced by a fake business provider in India, by representing themselves in the name of an organization. With fake promises and high return policies, he created a buzz and then, there are no returns as promised. As per reports, several subordinates got arrested, and still the scam is spreading out like a spider web.
How to avoid Ponzi scams?
- The easiest method to spot this scam is what they offer – if it’s too relied on the money terms then, you may want to avoid it!
- If the returns are too high – it’s a scam too!
- Avoid unauthenticated business schemes that offer high-profit ratio.
- Try to spot the uncertainties and understand the scam part.
Never get into such allegations and always be keen enough to understand about the business, its initiative, basic flow, about the organization, etc.
3 – BTC phishing scam
Email marketing is obviously one of the best strategies to advertise your brand as well as to reach out to the public attraction. With attractive email content, information or any updates can be reached out to the public and convert into potential business clients. However, lots and lots of scams involved in this strategy and many scams appear to pull out of this marketing model itself. A user gets attracted to such business emails by means of,
- New BTC investment opportunity
- Offers or prices slashes on Bitcoin
- The account got credited with BTC
- Trading opportunity with high exchange value etc.
And the main BTC phishing occurs in the case of “You’ve received BTC coins and login in your wallet to verify it!” All trust gaining aspects will be there in the email, and obviously, you’ll fall for it. Alongside with this email, a URL that redirects to your wallet will be there in the email content. And if you click on it and move further, it’s going to be a disaster. A new webpage will pop up that carries fake wallet login entry, and if you enter the details, the whole wallet data details will get hacked! You will lose all your current BTC’s available in the wallet.
How to avoid phishing scam?
- Avoid spam emails that offer you attractive BTC discounts etc.
- Never share your wallet credentials to strangers or outside people.
- Never share your private key for any purposes.
- Never click on unauthorized website links as it may grab your sensitive details.
- Never disclose or provide private details without checking the genuine side of the website or form.
Never get into such scams and make sure about it!
4 – BTC website/offline/physical scam (fake)
The real world never offers anything for free and if any pops up with a ‘free tag’ be aware of that website! Nothing in this world is free, and everything comes up with a price tag. Especially in the case of BTC, it’s high in value and always follows a market cap. This isn’t it! Just like the above case, there are plenty of case studies to check for – the fake exchange website, ICO website, ads, etc.
The above case studies always pass through the same website channel and drive in users to the system. Yup, a website is literally the point where everything begins, and as told before, you must be able to differentiate between fake and real! The other scam part is the physical Bitcoin scam, and yes it’s real! A popular website reported news about such scams in Russia. Gypsies are selling Bitcoin outside a local department store by making people believe that it’s in physical form.
How to avoid a physical scam?
- Bitcoin is not a physical asset and understands this basic fact.
- Avoid investments in the physical world like local departments stores etc.
- Offline BTC business via brokers will end up in loss of the good amount of money.
- Study the present digital scenario and then make the investment.
These false ideas make people suffer a great loss! Be aware of at least what cryptocurrency is and how to invest in it