Cryptocurrency scams can take many forms. Scammers are after your cryptocurrency as much as they are after the money in your bank, and they will do anything to get it.
To be aware of when and how you are being targeted by fraudsters, and to protect your cryptocurrency assets, it is useful to know what to do if you have reason to believe that a particular cryptocurrency or its underlying technology is fake.
Scams using cryptocurrencies aren’t hard to spot if you know what to look for. Non-scam cryptocurrency disclosure information is readily available. This disclosure includes specifics on the blockchain and any associated tokens.
White paper
Progress can be observed in the evolution of cryptocurrencies. Before this procedure is carried out, there is usually a document known as a document that can be viewed by the general public.
This document defines the conventions and the blockchain defines the formulas and describes how the whole system will work.
The people behind fake cryptocurrencies write poorly constructed “white papers”, contain information that simply doesn’t add up, tell readers what they imagine the currency will be used for, or don’t look like a real white paper at all. Counterfeit coins do not.
Team members
The members and designers behind a cryptocurrency should always be identified in the white paper for that cryptocurrency. In some cases, an open source cryptocurrency project may not have named developers; however, this is common with open source software.
You can check out most of the code, comments, and conversations on GitHub or GitLab. Certain initiatives use online forums and programs such as Discord for communication purposes.
Chances are, if you can’t find any of these and the white paper is full of inaccuracies, it’s a scam.
“Free” items
As a trader, we know that each of you are looking for free rewards, coins or even discount deals. And this is the point where you fall victim to the scammer’s fish trap. Scammers always strike a nerve when they trigger the impulsive personality of travelers who tend to manipulate with their false claims.
There are many cryptocurrency scams that offer you “throw” money in your wallet or free coins.
Please note that nothing, not even money or cryptocurrency, will ever be given to you for free. We all know that expectations hurt.
So, curb the habit of setting the bars high only for buying stocks, not your hopes. Because you are here to trade coins, not your feelings.
Marketing
In most cases, investing in cryptocurrencies does not result in financial gains. These are initiatives with a mission statement and currencies or tokens to be used to facilitate the operation of the blockchain.
Legitimate cryptocurrency projects will not use social media to promote themselves as the best cryptocurrency below, so you really shouldn’t miss it.
You may come across cryptocurrency updates that discuss developments in blockchain technology or new security steps being taken, but you should be wary of notifications like “raised $14 million” or links that give the impression that they’re more interested in money than money. with advances in the technology that underpins cryptocurrency.
Legitimate firms and trading assistance systems such as bitcoin trader exist to assist traders through the integration of blockchain-based principles to generate safe and sustainable profits. They may have currencies on their distributed ledgers that can be used to pay processing fees, but marketing should be encountered more formally.
They will have the financial resources needed to pay for celebrity endorsements and appearances and make all relevant information readily available on their website. These companies will promote the blockchain-based services they offer instead of requiring customers to acquire their cryptocurrencies.
Bottom line
The current frenzy surrounding cryptocurrency investments has many people reminiscing about the Wild West. It is inevitable that fraudsters will continue to focus on the cryptocurrency ecosystem as it continues to expand and become more complex.
Cryptocurrency scams often fall into one of two categories: those that involve social engineering to obtain sensitive account or security information, and those that involve convincing a target to transfer cryptocurrency to a compromised digital wallet.
If you understand the common methods scammers use to steal your information (and ultimately your money), you should be able to recognize crypto-related fraud early and prevent it from happening.
Image by Sam Williams from Pixabay