Learning How to Avoid Bitcoin Scams

By Daniel Zo Bitcoin, Scam, Malware, Phishing, Pyramid scheme

Every new trend that appears on the internet is bound to give scammers numerous opportunities to come up with various ideas meant to take people’s money away. Bitcoin is no exception to this case, as there are thousands of bitcoin-based scams that unknowing users can get involved in.

With this in mind, in this article, we will discuss the main types of scams and factors that you should keep in mind to avoid a bitcoin scam, whenever you see one. Considering the fact that few people truly understand the way bitcoin and the blockchain works, educating yourself should be the first step.

Bitcoin scams

Understanding Bitcoin Pyramid Schemes

These have been around for a while, and they’re quite hard to recognize. Most of these scams rely upon tricking users into getting involved in investments that promise a high yield, alongside with multi-level forms of marketing. Therefore, most of these scams promise that with a low investment, you will be able to multiply your income, by signing up more and more members using referral links. Theoretically, upon from referring users, you’re doing nothing else, which is why pyramid schemes seem so attractive. However, once a few hundred or even thousand users have signed up via referral links, the scammer will simply walk away, and the pyramid in question will collapse together with all the promises.

Malware downloads

Regardless of its nature, Bitcoin does seem attractive to people, so many will bite the opportunity of earning free Bitcoin in exchange for downloading a particular app. Providers which promise you bitcoin in exchange for downloading a software are likely scams, and the software in question, is likely a malware. Most scammers on this market will attempt to bait victims into following URLs, and downloading programs in exchange for the digital currency. Small amounts may even be given to further lure users into downloading the ultimate malware, which will either mess up your computer, lock it up in exchange for bitcoin, or spy on you.

Bitcoin Phishing

Phishing has been around for a long period of time, and it normally consists of someone impersonating the creators of Bitcoin or a wallet, in order to gain the victim’s trust. Most of these scams work by encouraging people to enter their wallet details, to see if they are eligible for some extra coins. It’s simply a way of getting access to wallet identifiers and private keys, which will then be used to steal the digital currency of those getting involved.

To keep yourself safe, don’t trust anyone claiming that they will give you free bitcoin in exchange for any of the ‘services’ outlined above. Avoid advertisements that seem too good to be true, and also be vigilant whenever you discuss the cryptocurrency with anyone that you haven’t done business with in the past.