Bitcoin frauds are on the rise as their value increases. This virtual currency represents a remarkable achievement in the cryptographic world. Satoshi Nakamoto used this technology to create something that users can’t duplicate. And this gives Bitcoin its enormous value. Today, Bitcoin’s market capitalization is worth billions of dollars. It’s, therefore, not surprising that people from all walks of life can see the appeal and value of this virtual currency.
But this brings out the positive and negative aspects of humans. Fraudsters represent the negative aspects of humans. These are people that want to use nefarious means to benefit from Bitcoin. This article explains ways to avoid Bitcoin fraud.
Use a Reputable Bitcoin Exchange
One of the best ways to avoid Bitcoin fraud is to use a reputable crypto exchange when trading this virtual currency. People use platforms like the bitcoin code automated bot to purchase and sell Bitcoin. Essentially, crypto exchanges allow you to buy this virtual currency using fiat money. You can also sell your Bitcoins to get conventional money.
However, not all sites purporting to be crypto exchanges are genuine. The social media is awash with links telling users to click on them to purchase Bitcoin at a discounted price. But this is usually a marketing trick for drawing unsuspecting users to fake exchanges.
Before visiting such links, ensure that they have HTTPS rather than HTTP. That way, you can ensure the encryption and security of their web traffic. Any link without the “S” at the end should be a red flag, meaning you should avoid it.
Phishing
Phishing is prevalent in the banking and finance industry. Impersonation of Bitcoin wallet, bank, or exchange provider characterizes a phishing scam, with fraudsters doing this via lookalike websites, deceitful links, and fake emails. Usually, a phishing email has a link redirecting the user to a site that impersonates your wallet or exchange. Here, fraudsters will require you to enter the details of your account trying to access the real one.
To avoid this fraud, check the email that sends you any link to ensure that it’s from your wallet or exchange provider. Also, avoid clicking on hyperlinks without hovering over them to ensure that they will lead you to a genuine website.
Ponzi Schemes
Ponzi schemes are common scams that fraudsters use to attract investors. Essentially, fraudsters promise unsuspecting investors high returns. For instance, a promoter can convince susceptible individuals to invest in a scheme that pays out significant returns from the new investors’ money. This cycle goes on until the scheme can’t find new investors. The promoter can also disappear with all the investment money.
Don’t invest via a site that promises to double your funds overnight to avoid this Bitcoin fraud. Essentially, avoid any investment opportunity that makes an outlandish claim. Spotting a Ponzi site might be difficult. However, avoid any investment opportunity with a referral program via which the promoter wants you to convince others to register.
Malware
Malware is a potentially devastating and common threat to Bitcoin wallet’s security. Fraudsters can install malware on a personal device or computer when thinking you’re downloading a program or software from a reliable source. However, this program will monitor your browsing activity and even collect your Bitcoin wallet details. Don’t download or install a software application from unknown or unreliable sources to avoid this Bitcoin fraud.
Blackmail
Hackers can persuade you to send them Bitcoin or allow them to access your wallet by instilling fear in you via email or phone. Fraudsters can purport to have incriminating information against you and even threaten to disclose it to your contacts. In most cases, the claims are false and baseless.
To avoid this, don’t share information about your Bitcoin holdings with other people. Also, don’t entertain people that send you unsolicited emails purporting to have incriminating information against you.
These are the most common Bitcoin frauds to avoid. Follow these tips to avoid losing your funds to fraudsters.