Ways to avoid Cryptocurrency Scams
It's no more news that many people have been the victim of being scammed by defaulters, Since Cryptocurrency is decentralized it's easier for scammers to scam people by promising optimistic results on Investments;
Today we will discuss ways in which people are scammed in crypto world.
Ponzi Scheme
Many have been scammed through ponzi schemes due to high return of investments. There are many scammed websites which promise high potential % of any amount invested my fellow Steemians they are all Scam don't invest in such websites.
Early last year (2017) Ponzi scheme was introduced in Cryptocurrency i.e Bitconnect promising 40% for every lends. I want you to avoid any lending platform.
Ethereum Founder tweeted about Bitconnect last year that;
Yeah, if 1%/day is what they offer then that's a ponzi.— Vitalik Buterin (@VitalikButerin) November 2, 2017
Many experts also warned people to avoid Bitconnect coins but unfortunately many people didn't listen and some also mislead people like @trevonjb due to the promising referral earnings.
Any Coin/Cryptocurrency that promise potential reward like 40% or at any random % don't invest it's probably a scam because that's not how Cryptocurrency in generally work. Market determine the value of coins due to Demand and Supply of Coins.
When Demand is higher than Supply = Increase in Price
When Supply is higher than Demand = Decrease in Price
Phishing
This is cloning of original websites. They make the website look like original but when you check the address from the address bar you will see that it's not original domain of the website you are intended to access.
When visitor fall victim of the fake site by putting in your login details the scammer who built the website will use it to access the website and which he could use to transfer your coins.
Any website you want to access make sure you check the domain name from the address bar before entering your credentials. fake websites of Bittrex, myetherwallet has surfaced.
image-credits: pixabay
Fake ICO
Since Cryptocurrency is decentralized and not regulated i.e no government support, someone could come in and start up ICO with the aim of good project but later scammed investors.
Be careful of any ICO you want to invest in, make deep research before putting your hard earned money in any platform.
many fake ICO claims fake people as part of their team.
A recent example of an exit scam was Confido. They successfully raised $300,000 at ICO before promptly disappearing.