How to Recognize and Avoid Bitcoin Scams

How to Recognize and Avoid Bitcoin Scams

Bitcoin market capitalization has gone through the roof recently, making the cryptocurrency both appealing and valuable to all and sundry. However,  Man is by nature, prone to deceit. The resurgence of bitcoin has brought along with it scammers angling to profit from the currency through nefarious means. Here are some of the forms of bitcoin scams you should be on the lookout for:

  1. Fake Bitcoin Wallets

Fake wallets are primarily targeted at introducing malware into your machine and subsequently steal your private keys and passwords. To ensure your security, we recommend that you stick to genuine market and peer approved wallets from certified merchants. Check out some of our approved wallets here.

Majority, if not all wallet vending sites have websites. So you might also want to check if the site comes with HTTPS encryption. There are also common incidences of fake sites mimicking legitimate sites but without proper security features. You might want to ask around before making a purchase from such a site.

If the wallet comes in form of a download, check the site for malware before you proceed with the download. Virus Total is an ideal site to check for such.

  1. Phishing Scams

Phishing refers to a deceptive strategy to lure you to a fake website where you end up losing your bitcoin through a fake sale or picking up malware. It is generally not good practice to click and follow hyperlinks embedded into emails if you are not sure about the source. Your email could have been picked up by hackers specifically to con you.

If you are not certain about the site, it is safer to manually key in the URL in your browser. Review websites can also be instrumental in helping you dig up information about a given platform before you commit to doing business with the site.

  1. Ponzi Scams

Ponzi schemes are ventures which promise heaven on earth with minimal effort. Be careful with sites that offer a promise of doubling your bitcoins in a couple of days. Another common feature of Ponzi schemes is usually an affiliate link-driven referral program. You will be required to share the link with other people, with the assurance of earning some extra cents when your referrals sign up for the program.

  1. Fake Bitcoin Exchanges

Any purported exchange using exaggerated advertising lines such as “save big by buying bitcoin below 10% of the market price” is mostly likely a scam. Be on the lookout for red flags such as lack of an encrypted web address (URL). A legitimate exchange should at least be hosted on a website with HTTPS, where the ‘S’ stands for secure. Do not trade on a website with only HTTP prefix.

You should also be careful with websites that require you to transact via Paypal. You will probably be asked to submit your Paypal email and then send your bitcoin to a specified QR code. There is a chance your money will never arrive and the next time you check, the platform will have folded.

  1. Scam Cloud Mining

Cloud mining refers to a joint venture where a group of people pool resources to rent cryptocurrency mining machines. Every member buys a share of the firm’s mining hashpower. Genuine cloud mining operations can be quite profitable.

Picking out fraudulent cloud mining firms can be tricky. Majority of cloud mining pools such as Bitclub Network are totally legit. However, scams still abound so it’s always important to be well informed before venturing out.

Research on the following before joining a cloud mining establishment:

  • A fully HTTPS secured website
  • Proper information on the kind of pool used to mine
  • Freedom to choose your preferred mining pool
  • Proper information on the ownership, location and operating procedures
  • Fully functional dashboards detailing your earnings
  • Good reviews from previous and current miners

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