The biggest challenge with the Bitcoin scheme across the world is regulation. There remains a very long road for Bitcoin to go, to become part of the average man’s general investment portfolio. The value of Bitcoin has gone up, and then it has come back down.
Over the years, it has truly taken investors, and anyone interested in the cryptocurrency, on a wild ride. However, as you become involved in the new digital monetary mechanisms known as cryptocurrency, it doesn’t take long to recognize there’s risk involved in these transactions. If you are looking to invest in Bitcoin these are the necessary precautions one should keep in mind. Here are 5 popular Bitcoin scam to avoid in 2021.
5 Bitcoin Scam to Avoid in 2021
1. Malware Bitcoin Scam
Malware has long been a way for hackers to get passwords needed to access computer networks or steal credit card and bank account numbers. Now they’re using it to conduct another one of the most common Bitcoin scams. If your Bitcoin wallet is connected to the internet, they can use malware to get access and drain your funds if you’re not protecting yourself from malware.
You can download malware by clicking links in your email. You can also download it from websites and social media. There might be a post, for example, where someone claims a certain programme gives you the access to mine bitcoins for free.
2. Fake ICOs
Dozens of new cryptocurrencies launch each month, and alongside these new tokens and coins comes a series of initial coin offerings (ICOs). As this is the perfect time to invest in bitcoin, the thirst among a crowd of investors for these opportunities has grown.
In a fake ICO scam, fraudsters will use Websites featuring fake ICO details to hype the project up to unknowing users. The website usually promises the moon and stars to new users who are desperate to make some profits. These sites then instruct users to deposit funds into a compromised wallet. Once your Bitcoin is sent, it becomes obvious you were duped. Fake ICOs are a big issue because they occur frequently and they cost investors millions.
3. Hardware Wallet Scam
Hardware scams can come in a couple of different varieties. In one scenario, scamsters sell hardware wallets to users with a secret seed phrase hidden under a scratch card. The instructions for the wallet ask users to utilize the seed key for the setup.
Once the wallet is set up, the hackers can then access it from anywhere globally and drain the funds in seconds. This scam has left more than one Bitcoin investor without their hard-earned satoshis.
4. Cloud Mining Schemes
Mining is the only way to extract new bitcoins without buying or exchanging them, but it has become an incredibly resource-intensive activity. Due to the unique way new coins are mined, it takes massive amounts of processing power and electricity, and thus money, to mine a coin. However, many companies now offer regular users the ability to rent some server space to mine coins for a set rate.
It’s also important to note that even if it’s not an outright scam, cloud mining will always be a bad investment compared to simply buying cryptocurrency, as will leasing any other form of cryptocurrency mining equipment.
5. Bitcoin Scam Exchanges
In a similar vein to phishing scams, keep an eye out for fake Bitcoin exchanges. They might walk and talk like a reputable exchange, but they’re merely a front to separate consumers from their hard-earned cash.
Some will entice users with promotional offers that sound too good to be true. Others pressure users into creating an account and depositing funds, perhaps even offering “bonuses” to those who deposit larger amounts. But once they have your money these platforms might charge ridiculously high fees, make it very difficult to withdraw funds or simply steal your deposit altogether.
Bitcoin is a volatile enough investment as it is. Don’t increase your chances of losing money by falling prey to these Bitcoin scams. Stay on the alert for potential Bitcoin fraudsters and trust your instincts. If something seems too good to be true, it in most cases, is.
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