Home News 5 Tips For Avoiding Common Cryptocurrency Scams – 2020 Guide

5 Tips For Avoiding Common Cryptocurrency Scams – 2020 Guide

by Biljana Denic

Investing in cryptocurrencies has become one of the most popular trading options in recent years because there are many types of tokens with great potential, and current trends are going in favor of blockchain technology. There are several methods that you can use to make a profit on the crypto market, such as trading, mining, and holding coins until they reach a higher price. Also, the fact that a lot of people are interested in using e-wallets as a regular payment method is affecting digital currencies to become more valuable. When it comes to trading, there are various platforms, like bitcoins-evolution.com, where you can analyze the market and trade by using various devices and platforms.

On the other side, such popularity of trading with cryptocurrencies also brings some risks from potential scammers, and you should be aware of all the methods they are using to steal your funds. Blockchain technology indeed represents one of the most secure platforms for storing sensitive data. However, scammers are also keeping track of the most recent technologies and trying to find a way to take advantage of people who are less familiar with the necessary security measures. Besides cyber-attacks, there are also other methods where you might get scammed. Here are some important tips for avoiding common cryptocurrency scams.

1. Pyramid and Ponzi Schemes

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When it comes to Ponzi schemes, we can hear a lot of stories about how people managed to scam large groups of investors with a system where they would be investing in some products and promised to get big returns. However, in most cases, there are no products at all, and the only money that you can get is from new people who joined the system. It is like a cycle that constantly needs new members who will pay to join the group, and small parts of that money are given to investors, while most of it will go into the hands of owners of this scheme. One of the biggest Ponzi schemes related to cryptocurrencies is One Coin that had a revenue of over $4 billion.

The Pyramid scheme is similar to Ponzi but requires more time to organize and provide the leaders with profit. In this system, the main point is to bring more people to the organization, and you will get a reward for every person you connect to it. The owner will set a fee that you must pay to join the group. Also, they always come up with some fake product, like a token without any background in the blockchain system, and attract people to join and bring their friends and family. Moreover, people who are lucky enough to become a part of this group in the early stages could indeed make a profit. However, the system is not sustainable, and the leaders would disappear with large amounts of money at some moment. Some of the largest pyramid schemes related to cryptocurrencies are Plus Token and Big Connect.

2. Phishing

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Another common scam is related to the attempts of scammers to steal people’s sensitive data. They are using different methods, such as fake apps, online platforms, phone calls, and e-mail, where they will provide you with a link with promises how redirecting to that web page will help you solve some issues or to register to some platform. If you visit that link with the same device where your store your cryptocurrencies, they might steal your funds along with other data. That is the main reason why most popular online crypto exchanges do not require you to type a password. The best way to avoid this sort of a scam is to pay attention to websites you are visiting because there might be a malicious one with almost the same address. You should know that there is no need to share your password or a private key with anyone.

3. Social Networks Scams

Source: avast.com

Since social media is so popular today among all generations, it is not a surprise that scammers would attempt to find victims over these platforms. In most cases, those scams represent private messages where a stranger would ask you to invest in his business and promise you a huge return. Giveaways are one of the most common scams over social media. They are using this method to lure people into sharing details of their e-wallets and steal their funds in the end. Therefore, if you ever get a message where someone guarantees you a great giveaway, you shouldn’t even open that message.

4. Fake Smartphone Apps

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Storing cryptocurrencies and trading with them over a smartphone represents the most convenient way. However, you should know that developers are still not able to create apps that assure maximum safety. Even apps from well-known exchanges might have issues with security. On the other hand, the biggest issue is related to fake apps that you can download from app stores. Google is not able to filter out all of the malicious programs so fast. Therefore, you should pay attention and use only those from popular companies. In case you download a fake app, the chances that someone will steal all of the funds from your e-wallet are very high.

5. Vested Interests

Source: thedailystar.net

It is very important to research the market before deciding to invest in any product, and the same is with cryptocurrencies as well. There are over 2,000 cryptocurrencies available on the market, but not all of them have the same potential. Also, you should be aware that there are vested interests, where someone will create a big fond as a background to some token, and try to attract people to invest in the same one. In most cases, this token doesn’t have any value at all, while the owner of the crypto will take away the money from investors. In most cases, that cryptocurrency will become worthless after some time. There are some factors that you should know, which can determine the potential of a particular cryptocurrency, such as the method of distribution, how many people are already in the system, functionality of supply chain, real potential, and more

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