CRYPTOACADEMY SEASON3 WEEK6 ASSIGNMENT POST FOR @yohan2on BY jimah1k
I DESIGNED THIS IMAGE MYSELF
Q1
What are Crypto scams? Make your research on any Cryptocurrency scam.
Crypto Scams
Ever since the development of cryptocurrencies a lot of people have invested a lot in these currencies, some people accept them as a form of trade for goods and services the world has never been the same since the introduction of these cryptocurrencies.
Some people want to take advantage of others to get rich ‘quicker’ or think they are smarter, they find ways and means to cheat the system. Crypto scam is now very common in the world of crypto currency’s, we all need to be ALERT.
Crypto Scams are conniving ways people(scammers) use to Rob people of their assets. Scammers have found a lot of tricky ways of deceiving other users just to get access to their funds. Sometimes it’s very difficult not to fall for a scam because when the scammers come to with let’s say a crypto currency’s asset they wouldn’t scam you at first they would advise you to invest and once you invest they will give you the profit you are supposed to earn.
When this happens the user gets supper excited and invest all his money and sometimes invites his friends to join him that’s when the scammer will disappear with all the money. So it is advised before we go into any investment make proper research about that asset of company.
Most of the scammers when they steal your assets it is very difficult to trace them as they prefer decentralized exchanges where they are no verification process and any requirements of personal data, so when they get hold of your asset it’s gone for good.
Apart from that scammers have also developed other ways and means of getting access to users asset I will be exposing some of them.
Phishing Sites and Links
This I would say is the most popular way scammers are able to steal the password and private keys of users in other to get access to their assets.
What they would do is create a fake website which can be accessed with a certain link so they would send this link to the target ( the person they want to steal from) sometimes to make sure that the target falls for the scam they would beautify they link like ‘CLICK HERE TO STAND A CHANCE OF WINING 0.5 BTC’ so once the target sees this he gets very excited and clicks on it.
The next step is to ask the user to log into his BTC wallet to redeem his prize, once the target enters his username and private key the websites will send the details to the scammer, so now the scammer will also have access to his assets since he has his keys.
A popular example we see is here in steemit someone created a phishing link and sent it users saying ‘CLICK HERE TO REDEEM 100STEEM’ so ending plagiarism has to go round to warn users about the phishing link sent to users.
Fake ICOs
This is another larger scale scam, I call it larger scale because this type of scam usually gets a lot of investors and a lot of money if properly done. ICO’s stands for initial Coin offering, anytime a company is established the company will need funds to start up so what they do is to creat a token which will be used to raise the funds for the company.
So scam ICO’s create a fake company with a fabricated white paper which contains the companies plans in the future and will send it to the public so once the public reads the white paper they become interested in the fake company and decided to invest by buying their tokens, so when the scammers gets the amount of money they need they disappear.
Fake apps
This is another popular scam scammers use to trick people. This type of scam also targets a large group of people technically what happens is the scammers with the help of technology will create a fake exchange app and upload it to either google play store or the other stores for users to download.
Doing that alone is not enough to convince people so what they do again is to advertise somewhere like face book saying that this app doesn’t take transactions fees, some people will also say when you send 1BTC you will save 5% BTC.
When people see this they are tempted to go and download and send their assets to the fake exchange app. When they do the next thing you see is the app has crashed and other stuffs when you check again your assets wouldn’t be there again.
According this news 10,000+ people download fake apps
Social media scams
This are the platforms the hackers advertise their scams once they have initiated a scam they next step is to sell it (Get more people) where do people spend much of Their time?? The answer is social media like Facebook the most popular, Twitter and also Instagram.
From my above explanation of the ICO scams, I mentioned them posting or advertising it on Facebook which is true sometimes they add a little specie to the lie by using other fake accounts and commenting below their own publication by saying ‘I invested $50 now I have $200’ or something like that to promote their scam and many of us fall for it.
Like I said before before venturing into any business try to research on it before you invest. And also follow the major rule invest what you can afford to lose
Make your research on any Cryptocurrency scam.
I have made some deductions when it comes to crypto scam and what I noticed was first the scammers will bring out an idea, the next step which is the most important part is to sell it to the public once you are able to sell it to the public. And they buy it ( get interested) your project they are going to invest more and possibly invite family and friends.
Five years back one the greatest scam ever to hit the world of crypto currencies occurred which was sole planned and master minded by a woman who is named Dr. Ruja Ignatova, who after the scam earned herself the name ‘Crypto Queen’
What the crypto Queen did was to follow three scam steps, the first thing she did was to create her own cryptocurrency which was named ‘Onecoin’ , which was the first step, this step wasn’t enough to gain a lot of people.
The next step was to sell the coin to the general public (advertise). To do so she could have done that through Facebook and other social media platforms but come to think of it doing that will surely get people but that would not be enough so she decided to come out publicly and explain her project. Remember I said the second step is very important in other to gain the attention you need.
So explaining the one coin publicly showed how serious the coin was she also said one coin will be the ‘Btc killer’ I believe this was what caught the attention of the general public because most investors had missed out on BTC in 2009 so they didn’t want to miss out on the One coin which is supposed to dethrone BTC.
After the general public bought her whole speech it was now the final step which is where the public invested lots of money into the coin it was estimated that about 1.5 million people invested into this coin which amassed an amount of over $24 billion world wide. After her scam was a big hit and lots of money was invested she disappeared and up till now there haven’t been any trace of her only pictures of her are remaining.
Source
Source
Authorities were able to arrest only two of her co workers but haven’t been able to find her.
In 2017, year scam was brought to light and it ended whiles she was no where to be found, her scam really caused displeasure among those who invested heavily in one coin. That is why Its advised that invest what you can afford to loose so Incase of any scam you wouldn’t be much affected because you wouldn’t loose everything. You can follow up about the Crypto Queen and this Scam HERE
Q2
To what extent have Crypto scams affected the Crypto space?
It’s no doubt that crypto scams have affected the crypto space I will be talking about some of the ways it has affected the crypto space.
To begin with, one major way they affect the crypto space is after the big scam that happened in 2016, many people have said that they will never invest in any crypto currency’s because they think it might be a scam and I don’t blame some of them because the have lost lots of money and wouldn’t want to go in again but the truth is that not to all currencies are scams legit crypto currency’s are there but are affected because people think all are scam all because of the one coin scam.
Also, crypto scams has lead to the banning and restrictions of the usage of cryptocurrencies in certain countries like China they have banned mining and exchanges of crypto currency. For me the main reason for this is when you look at the chart for countries who invested in the one coin China was leading so the country lost a lot of money so in 2018 the ban was placed.
Another way it affects the crypto space is it can change the trend of an assets let’s say the assets is in the a bullish trend and a rumor about a scam concerning that assets can change the trend to a bearish trend because lots of the traders wouldn’t want to loose all his money so will exit thereby creating a bearish trend.
Q3
Will regulations in Crypto add value to the Crypto space?
Regulations in crypto will surely add value to the crypto space because we all know most scammers target the ICO’s to sell the token and run away when regulations are introduced before you can Step up an ICO’s you have to meet certain standards this help help greatly reduce the number of scammers in the crypto space.
The main reason why China banned mining and exchanges of cryptocurrencies is because of scams so once regulations are introduced the amount of scams will be greatly reduced they will be monitoring the cryptocurrencies ecosystem. Once we get the population of China in the crypto currency’s space it’s going to be a massive boost for our cryptocurrencies.
Conclusion
I want to commend our professor @yohan2on for this wonderful lecture at least users who don’t know much about how scams works will have understood by now. And when investing, invest the amount you can afford to loss not all your assets. And I also learnt that anytime you open a website that starts asking for your private keys and certain personal details you have to exit that website and quickly change your keys.
Thank you for this wonder lecture.
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