Avoid Bitcoin Scams

You need to protect yourself and try to avoid Bitcoin scams.  Whenever there is money involved, there are usually scams involved as well. This especially happens in emerging markets and industries, where there is a potential to earn a lot of profit and money. Most people choose to earn money the right way but there are a handful of people, who would rather scam and steal other people’s money. After all, everyone wants to make lots of money in as little time as possible. But some people are willing to cross the line to do so.

Since making huge profits is an actual reality in the case of Bitcoin and other cryptocurrencies, there have been a lot of scams and other nefarious activities since their inception. This is mostly because it is a totally new industry and it takes time for people to get educated about how they can safeguard themselves. Also, in the initial phases, laws and regulations are not that clear and some people tend to take advantage of that grey area.

 

Also Read: 

Is Bitcoin Legal In Canada

Regulation of Cryptocurrency in Canada

There are some common scams that you should be aware of while navigating the world of cryptocurrencies. As always, self-education is the most effective way to protect oneself from prying eyes. This is highly important as finances are linked to the well-being of not only you but your family as well.

Bitcoin Scams to avoid

Phishing

One of the most common ways people scam others is by phishing. There are many ways that this is done. People set up copycat websites of popular exchanges such that the URL is not easily discernible. When people accidentally go to these fake websites and enter their login information of the real exchange website, their information is stolen by the creators of the fake website. They then lock you out of your own exchange account and steal your funds.

 

• • • Alway double check the hyperlink and make sure it is correct.  

 

• • • When reading emails, be suspicious of threats or urgent emails from large corporations or companies that you are subscribed to. Unless on that rare occasion, most company will never send you emails that require you send login via a link.

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  • • If possible, when browsing check for the HTTPs security connection. It is usually indicated by https:// and a security “lock” icon in the browser’s address bar

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Ponzi schemes

Another common scam is by peddling Ponzi schemes. Scammers lure in gullible investors promising them huge returns in a short amount of time and ask for an initial deposit of Bitcoins. They create a pyramid scheme where future depositors’ of Bitcoins are used to pay the previous depositors. Ultimately the whole system fails and the scammers run away with everyone’s Bitcoins. These sort of Ponzi schemes are common in the traditional markets as well. We should always be wary of such empty promises.

Hacking

Hacking is another method scammers use to steal people’s Bitcoins. They spread malware on the internet through apps or emails, which find their way to unsuspecting people’s computers. Some malware programs, for example, can change a Bitcoin’s address after you paste it from the clipboard. So, if you are transferring your Bitcoins from one address to another, you need to check twice that you’re sending them to the right address.

Ransomware

Ransomware is another example of a malware program. It essentially hijacks your whole system, where you cannot do anything on your computer. The hackers ask you to pay some Bitcoins as a ransom if you want to regain control. If you have valuable files and information on your system, you are forced to pay this ransom.

Free Bitcoin

Free Bitcoins are another way scammers steal people’s Bitcoins. Everyone wants to earn some free Bitcoins easily and scammers use this to fool them. They spread their fake giveaways on social media platforms and people spread them to make them viral. These scammers usually ask you to deposit a small amount first before they can give you the free Bitcoins. They may also ask for some personal information which they can later sell. As a result, you lose the coins you already have as well as your personal information.

Another very popular tricks for scammers is a pump and dump scheme. Since it is quite easy to create a proof-of-concept cryptocurrency, many people use it to attract gullible investors. They promise that the price of their coin will rise to great prices because of so-called partnerships with reputed brands. After a lot of these investors pour their money into their coin, the price naturally increases. At this point, the scammers dump all of their holdings on the market. The scammers become rich and the investors are left holding bags of worthless coins.

Some scammers establish a cryptocurrency exchange for the sole purpose of stealing other people’s Bitcoins and other cryptocurrencies. People who are not aware of these things, start trading on these platforms and after a critical mass of people is reached, the people behind the exchanges suddenly run away with everyone’s cryptocurrencies. This is also known popularly as an exit scam. There have been many cases of this and a lot of people have lost their money as a result.

These are just a few of the Bitcoin scams out there that you should try to avoid

Extortion scams

Extortion scams also know as “sextortion” scams are emails that try to black mail and extort bitcoin from the victim. These types of emails usually threatens to make embarrassing information public unless the victim pays up.

Things Changing For The Better

As is always the case with technological progress, as the years pass by, more and more people become aware of the technology, how it works, what they need to be cautious about and more. This is usually called consumer education. Once people know how to safeguard themselves, it is easy to ward off scammers.

Since cryptocurrencies have been around for a while, people are getting more and more educated with each passing year. Also, early adopters are playing a crucial role by organizing events and spreading valuable resources to teach people about the ins and outs of cryptocurrencies.

The world governments are playing a really important role as well. Many countries have already laid out clear laws and regulations and have prescribed harsh punishments for wrongdoers. This closes the lid on people who were taking advantage of cryptocurrencies being in a grey area. This has also gotten rid of the black markets, that were once associated with crypto and things are gaining mainstream attention.

Cutting edge security measures are also being developed by many companies that are safeguarding crypto investors and traders. This is similar to how antivirus software was first created to combat the problem of viruses when the internet became a popular phenomenon. As time goes by, these security measures will only get better and better and scams will get minimized to a great extent. There is a positive shift already taking place.

Also read:

What is an Altcoin?

Trading Bitcoin For Beginners

Bitcoin Price

 

You can Buy Bitcoin in Canada directly from PCCEX buy signing or registering. Buy, sell and trade Bitcoin and other cryptocurrency  on PCCEX, Canada’s best cryptocurrency exchange.

 

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***Please ensure to declare any capital gains or reward income to your local taxation authorities to ensure you always remain compliant. Cryptocurrency purchased on illegitimate exchanges that do not run KYC may not be supported and have been listed/traded there without our permission. Investing in cryptocurrencies is a high-risk and volatile

 

 

 

Protect yourself from Bitcoin Scams