Easy Ways To Detect And Avoid Bitcoin Fraud Schemes

Have you been duped before on Bitcoin? If yes, read this article, and such thing will not repeat itself. Bitcoin is a cryptocurrency and worldwide payment system that uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.

Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin, and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.

Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games. But the most important is getting rich by trading it.

How To Get A Bitcoin For Your Self

First, get yourself a bitcoin wallet. Next, you will need a place to store your new bitcoins. In the bitcoin world, it’s called a ‘wallet,’ but it might be best to think of them as a kind of bank account. Depending on the security levels you want, different wallets will provide different levels of security.

How To Buy Bitcoin With Cash

Find a seller in your area who accepts cash.
Select the number of coins and place an order.
Receive account number from the seller.
Deposit cash into the seller’s account.
Upload your receipt to prove you made the deposit/trade.
Receive bitcoins!

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Many have been duped and scammed on bitcoin and because of the risks in the market the opportunities may be irresistible for some people. So to be cautious and there are clear signs of scams that investors can look for, and by avoiding these scams, users can have a better chance of success and their investments protected.

Common Cryptocurrency Scams & How To Avoid Them

Here are some of the most common Cryptocurrency Scams and steps to avoid them:

Fake ICOs

In these case, the ICOs themselves may be at fault, for example, the Centra Tech company which is a blockchain venture backed by several celebrities has been sued in the US for portraying fake team members, lying about their products and misleading their investors.

To avoid such scammers, you have to learn as much as you can about the company to avoid being scammed and to do thorough research which involves picking apart the white paper, reviewing the team behind the venture and keyboard members or investors. By creating fake websites that resemble ICO’s scammers can separate investors from their bitcoin and by telling users to deposit their coins in a compromised wallet.

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Exchange Scam

Exchange Scams are not hard to spot but can be deadly if not detected. Most cryptocurrencies are still bought and sold at exchanges, and Many investors have been rendered penniless because the trade they signed out for turned out to trap and one of the most significant problems is unrealistic prices and transfers that promise massive discounts just to lure in unsuspected victims.

Here, your web addresses should always begin with HTTPS a sign which means that the traffic is encrypted, always check the exchange URLs, always look for the right signs to avoid losing money and finally avoid visiting unsecured websites.

Cloud Mining Schemes

In this, new bitcoins are extracted without buying and exchanging them, and it has an incredible resource-intensive activity. It takes a tremendous amount of processing power and electricity, and money to mine a coin and several users have been offered by many companies the ability to rent some server space to mine coins for a set rate.

Some companies hide their actual costs and diminishing returns, and also some companies offer lifetime contracts which cost the same and even provide outstanding performances and as a difficulty of mining increases the same investment will return smaller amounts each time. Therefore it is essential to know the cost and dangers associated with mining before investing.

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Hardware Wallet Theft

Hardware wallet theft is a physical device that stores users private keys.This hardware security is a popular option for users that are concerned with security and privacy. This wallet offers an offline way to help crypto investors protect their bitcoin, and there has been a report that some of the built-in vulnerabilities which open them to hackers that could easily steal all user’s holdings.

In this case, users are scammed by selling hardware wallets to users with a pre-configured seed phrase hidden under scratch card and set up the purse with the compromised, and these create a backdoor hackers to drain funds once a wallet is activated merely. These scams are becoming more common, but they can easily be avoided by only accepting purses from trusted sources.

Multi-Level Marketing

Multi-level marketing scheme offers quick returns, but they take more money from the investors for the sake of higher profits.

In this, scammers offer more substantial sums of bitcoins to the investors just to scam them. Preventing these scams on time, one can protect the investor’s wallet, and it is essential to pay attention to the company’s exceptional print and ensure that their claims are feasible and real. Therefore before one invest in such, one must be vigilant and smart by researching before investing in bitcoin to avoid being scammed.

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