Introduction
Crypto scams are a dime a dozen. No matter how much you think you know about crypto, there’s always something new to learn about crypto scams. In this post, we’re going to cover some of the most common types of scammers and how they operate so that you can avoid getting caught up in one of their traps!
Ponzi schemes
Ponzi schemes are a type of scam where a person or company promises to pay you high returns on your investment, but instead pays out returns to old investors with funds from newer ones. This is also known as “pyramid” or chain-letter schemes.
The best way to avoid a Ponzi scheme is to know what they look like and how they work:
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The company appears to be very successful and growing rapidly, but doesn’t provide evidence of its success (financial reports, press releases)—and the website itself looks suspicious.
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They offer you big returns for very little risk on your part (or no risk at all). For example, if someone says they can double your money in 90 days without any risk whatsoever—run away!
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They pressure you into investing quickly by saying that there are limited opportunities available or by making big claims about how much money others made with their investment strategies before that opportunity closes down soon after you invest in them because it was only available for so long this time around… which makes sense because who would want something good like this going around forever?
Pump and Dump
Pump and dump is a type of fraud that occurs when someone dumps a stock(or cryptocurrency) they own by releasing false information to the market. The scammers promote the stocks with misleading claims, and then sell their own shares at the inflated price. To avoid being scammed, make sure you’re not falling victim to pump and dumps. Look for these red flags:
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A company that has no products or services yet has an enormous valuation (like some cryptocurrencies).
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People who are promoting a stock without disclosing any financial interest in it (e.g., if they own shares).
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If you suspect something might be up, check out online sources like Reddit or Twitter before investing in anything—if other people are talking about it there’s probably good reason why!
ICO scams
Scams in the cryptocurrency ecosystem come in many forms, but none is more prevalent than initial coin offerings (ICOs). The founders of a new project will often release a whitepaper describing what they want to do and how they plan on doing it. Investors send them money in exchange for units of the new cryptocurrency, usually coins or tokens that are then purchased on an exchange. However, it’s important to note that ICOs are not cryptocurrencies themselves; rather, they represent some sort of investment.
The problem with many ICO scams is that they’re perpetrated by anonymous entities who know little about technology or blockchain protocols and simply use buzzwords like “blockchain technology” because it sounds good to investors who don’t know better. It’s also easy for scammers to disguise themselves as legitimate projects by copying other popular concepts; recent examples include Bitcoinus and Utrum ico scams . Further complicating matters is that many ICOs actually have real products behind them—but these products may not necessarily be part of any existing blockchain infrastructure!
Crypto jacking
Crypto jacking is a type of malware that uses your computer to mine cryptocurrency. It can be downloaded onto your device when you visit a website with an embedded cryptocurrency miner, or it may be installed by an attacker who has gained access to your system through other means. If you want to avoid this type of scam, there are several things you can do:
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Make sure your antivirus software is up to date and enabled
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Install extra antivirus software—this will keep most viruses off your device until they become so prevalent that the developers have updated their software with detection methods for new threats.
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use caution when deciding on antivirus software as these can also be trojan horse malware programs. Make sure you get your software from a reputable source if you decide to go this route.
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Stay informed about what’s happening in the world of cybersecurity—reading news stories about cybercrime helps keep you informed about new exploits and vulnerabilities that could affect users worldwide (and thus, should also inform strategies for protecting yourself).
Fake wallets
Fake wallets are a major crypto scam. They can be used to steal your coins, your private keys, or even your credit card information. These fake wallets are typically software that looks like the real thing but is actually malware meant to steal users’ money and personal information.
The easiest way to avoid fake wallets is by using only trusted sources for downloading cryptocurrency applications. If you’re not sure whether an app is safe or not, do some research before downloading it!
Bitcoin is the most secure form of payment ever created, so make sure you understand the risks and how to secure your funds
Bitcoin is a revolutionary technology, and it’s not a scam. So why do so many people think it’s a scam?
There are two main reasons: ignorance and the media. If you don’t understand Bitcoin, you’re likely to see it as something weird and confusing, which makes it seem like a scam. And if you only read mainstream news instead of alternative sources that are more knowledgeable about cryptocurrencies like Bitcoin magazine, or Cointelegraph, then chances are your impression of Bitcoin will be distorted by fear-mongering headlines on sites like CNN that say things like “Bitcoin investors lose $1 billion in ‘pump-and-dump’ scheme.”
The good news is that with some basic education on how cryptocurrencies work and what makes them secure—and by learning some common red flags for scams—you can protect yourself from falling into these traps while also appreciating the benefits of using this revolutionary technology!
Conclusion
Now that you know how to avoid scams, the next step is to get started. You don’t need to master it all at once—in fact, we recommend starting with just one thing. But don’t let fear stop you from doing anything in crypto; remember that crypto is not a get-rich-quick scheme and there will always be risks involved. With time and practice, though, you’ll become a pro at reading between the lines and seeing through scammy marketing tactics like these! If ever in doubt feel free to reach out!
