Steemit Crypto Academy Contest / S6W5 - Common Crypto Scams And How To Avoid Them

Crypto Scams are various ways, scheme and machinations built by fraudster around crypto to swindled unsuspecting persons, firms or organizations interested in buying or investing in crypto.

your being here shows you have some interest in crypto, and it will be a smart move to learn more about some of the risks associated with crypto. I implore you to read on so you can learn more about some common crypto scams, and how to spot and avoid them.

Fraudulent ICOs
A good number of scam comes under the guise of an initial coin offering (ICO). An ICO is like a crowdfunding process through which a start-up crypto company raises capital from investors who buy the Beta version of the coin at a significantly reduced rate. Fraudsters often capitalize on the fund raising capability of ICOs to swindle investors over a coin they never intended to fully develop.

Cloud mining scams
A cloud mining company makes it possible for a person to mine a coin without having to buy any mining hardware facilities. So in effect you are renting their mining equipment. However, most mouth watering offers from cloud mining are from scammers.

Fake apps
Fake applications on the Google and Apple stores are another common strategy used by scammers to trick crypto investors. A good example in this category is the Poloniex app which poses as the official Poloniex app. When installed, it will steal the users account details and their coins.

Fake websites
Using a similar but slightly altered domain name, the scammer may create a fake version of the real cryptocurrency trading platforms or fake crypto wallets to trick unsuspecting victims. Their aim is to phish your details or steal your coins.

Phishing scams
Crypto phishing scams involves the use of clever social engineering to target information that relates to online wallets with the aim of acquiring private keys, once they have access to your private key, they will steal the cryptocurrency in your wallet.

Pump and dump schemes
Here the scammer buys a chunk low value coins and may use social media to hype a low-value asset often using bots to spread the propaganda and luring others into buying the coin and having succeeded in inflating the price of the coin, the scammer sells off his holdings resulting in the sharp fall of the coins value.

To help you identify and protect yourself against crypto Scams, start by learning more about crypto and how it works then be on the lookout.
When guarantee of a return are too good to be true, you should remember that there are always risk in every real business venture. Quick and high returns are often used as baits to appeal to our greed.
At other instances, the lure of free coins may be used and if the ICO lacks or has a poor whitepaper that doesn’t make any sense. A whitepaper is created to help explain how the cryptocurrency is designed, showing a blueprint explaining how it will work. Investing in an ICO without a good whitepaper is an uncalculated risk.

The inksnation Pinkoin came with hope to the people of Nigeria who's economic situation make any glimmer of hope a venture worth exploring. Lots of offices were opened and agents were recruited issuing the ATM debit cards posted above.
Registration was swift and even when the government issued statements that inksnation and pinkoin were a Ponzi scheme, a good number of uninformed Nigerians are still waiting for the kickoff of Pinkoin.

The inksnation Pinkoin often presented itself as an initial coin offering (ICO) to high end investors but to those who could not understand the concept of an ICO, it was simply presented as a way to make extra money with less efforts, you simply need to register using the registration form above issued by any of their agents.
The agents were to buy the Pinkoin you get from inksnation using their own money then trade it back to inksnation. A good number of agents are still holding the Pinkoin they got from the public.

Get informed
Get as much information as you are receiving from this post, do some research and go through any available Fack cryptocurrency list. Note that most outstanding crypto currency are safe in itself but you may be swindled in the process of acquiring it. If the coin is new, read and study it's whitepaper carefully.

Make sure of your wallet
Make use of a trusted wallet and make sure it has not been tempered with. Test run any newly installed wallet by transferring a small amount into the wallet for observation. Even a reliable wallet can be compromised after an update. It is good to use a wallet that has privet keys.

Understand your investment
You should invest in things you can understand, if it's working are not clear then you should take your time and try understanding the investment before you decide whether or not to invest.

Maintain a healthy skepticism
Do not trust all stories on the social media, and update your knowledge of technology. Deep fake can be used to create a video of Elon musk offering free crypto. With a good storyline to it, you could become a victim. I personally refer to a healthy dose of skepticism as an activated firewall.

Developing a healthy dose skepticism serves as a firewall which keeps off fraudulent scams but may also keep off good opportunities that have suspicious appearances. It's best to get informed as a protection against scammers.