Steemit Crypto Academy | Season 3 week 6 - Crypto Scams and How To Avoid Them.

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A special shout out to my Professor on this: @yohan2on. You made this an enjoyable class and with practical examples to relate to. Thanks a lot for being intentional about imparting this knowledge to us all.

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INTRODUCTION:

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Cryptocurrency is new and with the waves it has been making for many years now, it is understandable that many people will want to exploit it to the detriment of others. There have been many investors and traders as well as so many people learning the art of how to get the best out of cryptocurrency. With unsuspecting individuals, they are more susceptible to crypto scams and attacks as it is with anyone who would want to take advantage of anyone to their own gain.

When the purpose of a thing is not known, a wise man once said, abuse is inevitable and to this I would say, when the benefits of a thing is known, it attracts both people with good and bad intentions.

1. What are Crypto Scams?

Make your research on any Cryptocurrency scam. (Attach a few references to the news surrounding that scam crypto project)

With my exposure to the Cryptocurrency world, I have heard and see a lot of Crypto Scams being perpetuated by people for unsuspecting individuals who want to learn and understand how Crypto works or those who want to take advantage of the benefits that the crypto world brings.

There are few Crypto Scams that I will mention but it's not limited to these:

A. Pump and Dump:

I mentioned this one first because I might have been a victim of it at some point. This is when people gather together to deliberately pump a token by buying or investing into it massively which will make it gain attention and many will like to invest in such 'moving train' for the fear of missing out (FOMO). And the moment they have gotten attention and considerable number of other investors, they pull out their own funds and leave those who invested in it at a loss as the token will crash with reduced value on them.

I recently invested in a token called "Events" and because I didn't make adequate research and I didn't want to miss out because that was the time so many "shit coins" as we called them were pumping - bullish, I joined in. A few days after my purchase, the price went crashing and now it has no value in my wallet.

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There is the need for investors to make adequate research and ask the right questions to avoid situations like this. The Cryptocurrency space is wide and that makes it easier for so many people to device a means of scamming people.

B. Phishing Sites:

I still get some fake coins being sent to me and when I want to check how to redeem, they will link me to a site that would require my details to initiate a transaction. I didn't participate in any airdrop and seeing those sites looking alike for so many of the 'free tokens' they sent to me, I knew it was fishy.

Phishing Site is another way people get scammed because these scammers would create a fake website that either looks like an original or that looks genuine as an exchange site to steal information off unsuspecting individuals.

To be certain the URL you have been linked to is original, you will find the sign of a padlock just before the URL. Any site without that sign is definitely not a valid site.

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C. Fake Applications:

I haven't fallen victim of this but I have read a lot from group chats how many people downloaded a fake Trust Wallet Application and all their tokens they gathered got wiped out without a trace. They even created a Facebook page linking people to download such a fake application.

To avoid this, checking a verified website for such a token would go a long way to reduce this particular scam. Follow the link provided by the verified website to get the true application.

D. Giveaway Scams (Celebrity Endorsement) and Online Dating Scam:

A lot of people have fallen victims of these two types of scam. I decided to group them into one. Most people get lured by celebrity giveaway without knowing the account has been compromised. They are promised they would receive double for the value they are going to send. Most have lost a fortune as a result of this. Over $2 million worth of Crypto assets have been sent to an imposter of Elon Musk over the past 6 months.

The other type is the online dating crypto scam. They would believe they are in a relationship with their lover but the supposed lover would give a hint about a new token that is thriving which is an attempt to scam the other person.

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[Source]

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I came across a Cryptocurrency scam called Bitcoin Savings and Trust. They started out as a Ponzi Scheme and even created a fake ICO (Initial Coin Offering). Investors were promised a 7% return per week and most people got on board with it which led to more than 265,000 Bitcoins stolen. You can see reference here

2. To what extent have Crypto scams affected the Crypto space?

It has affected the Crypto Space a lot because most people have come to see Crypto as a scam. My country, Nigeria recently banned the trading of any Crypto asset because the government said it is making her citizens to lose their capital. India never adopted it either and China is struggling to adopt it too and that prompted the move made by Ethereum founder; Vitalik Buterin that donated Shiba Inu to India so as to pave the way for the massive adoption of it.

A lot of people see Cryptocurrency as a scam due to these incessant scams going on around and it makes it hard to convince anyone to invest in it without them giving you the funny face. I believe with time, especially with the way the Crypto Space is growing, the massive adoption would be on because without a doubt, Cryptocurrency is the future.

3. Will regulations in Crypto add value to the Crypto space?

I would say this would go both ways. It has its advantages and also it's disadvantages. Regulating it means the privacy that most people have enjoyed over now would no longer be there. There would be government interference which has been lacking before now and that would mean tax would be implemented. This is one of the reasons why the government of most countries have been against Crypto because they can't control it and due to the privacy it gives to the users. With regulations, tax would be factored in and government will interfer which can in some way limit the scam being perpetuated by fraudsters.

With regulations, it would make investors to become more comfortable in investing. Any investor wants a conducive environment before an investment can be made and with adequate regulation, more investors can be attracted as they would feel safe with their investments.

CONCLUSION:

Every venture is a risk and more so, the crypto world. I believe with better understanding of how crypto works as with any business venture, a lot of people can invest in it and find ways to curb the scams that is making the crypto space look bad. Being out of the reach of the government has given so much hope to individuals in struggling economies and it's not surprising that the government are fighting it. Cryptocurrency cannot be stopped and it's better to get in early so as to reap the benefits. The advantages outweighs the obvious disadvantages that most people are holding on to.

Thank you for your time.