5 Bitcoin Frauds You Should Beware
Although there are many well-intentioned Bitcoin initiatives, like protection and security promises, some initiatives in the cryptocurrency universe have been established for fraud. Therefore, cryptocurrency users should avoid being an instrument to such malicious purposes. In this article, we will talk about the most commonly used fraud methods in the world of cryptocurrency and how to take precautions.
Fake Cloud Mining
At the top of our list of fraud activities is fake cloud mining. This type of fraud occurs as follows; people who identify themselves as cloud mining initiatives attempt to attract users’ attention by announcing that they are mining without mining equipment.
In this type of fraud, they delude users with the promise of high profit. They are constantly in pursuit of selling and renting without any devices or a place to store data. But the result is always the same. As in the Ponzi activity, which we will explain below, the systems collapse and the investments of the users disappear.
That’s why; users should pay attention to whether the mining companies are real or fake. You can learn more about this by browsing our articles about mining process on our blog page.
Beware of Phishing!
The second line of our list is phishing, a fraud that anyone can easily fall for. In this kind of fraud, they produce the exact same websites of the cryptocurrency platforms containing user information. Even with the same URL addresses, these sites allow users to log in with their user name and password, which gives them to access to all the information.
When you log into a fake site like this, your assets on the actual site may disappear in an instant. That is why, you should be aware of phishing sites to avoid this kind of fraud.
Bitcoin Wallet Applications
In the crypto currency world, every user intends to store their assets in a highly secure environment. Since cryptocurrencies became so popular, many non-secure Bitcoin wallet applications and websites have emerged.
As with other fraud methods, they tell users that they will make secure storage conditions at very low prices or free of charge. Then they disappear and victimize the users. To avoid this, you should do a thorough research about the site and the history of the company, and check the comments written on the cryptocurrency forums about the wallet application or site you want to use.
The Ponzi Scheme
In this type of fraud activities, there is a reference system to delude the users. The users increase their revenue if they invite new customers, but customers called with reference do not realize that they are defrauded.
In this method, the tables presented to the customer are as follows: by showing the rising revenues of the users entering with a very low amount, the users think that they will make a high profit. For this reason, they want to attract more people to the site with referral, and consequently the fraud site starts to become popular. In the Ponzi scheme, only a small number of users profit while the majority loses their assets.
At the end of our list are cryptocurrency exchanges. Users should not invest in any cryptocurrency exchanges. There are some major crypto exchanges for this purpose. You can prefer cryptocurrency exchanges such as Binance, Huobi, Paribu, OKEx. You should beware of the exchanges whose main purpose is to defraud investors.
Investment information, comments and recommendations contained herein are not included in the scope of investment advisory. Therefore, making an investment decision based solely on the information and comments contained herein may not produce results that are in line with your expectations.