Currency Trading

Bitcoin Scams and How To Avoid Them

With the value of one Bitcoin surpassing the cost of an ounce of gold, cryptocurrency is all the rage. It seems that Bitcoin is only going up, and that news has people everywhere looking for information on how they, too, can profit from cryptocurrency.

Why Bitcoin Scams?

First, for the unfamiliar, cryptocurrency is online currency. It’s ideal for theft and criminal activity for a number of reasons.

Bitcoin is decentralized. It isn’t controlled by any central authority. If someone is scammed, there’s no back or credit card issuer to regulate or provide any refund. Bitcoin transactions are also irreversible, which is a scam artist’s dream.

Bitcoin is also anonymous. No identifying information is necessary for a Bitcoin wallet. This makes Bitcoin the obvious preferred form of payment for criminal activity, especially in the dark web of the internet.



Types of Bitcoin Scams

Fake Bitcoin wallets hiding malware. As a user clicks through a URL posted someone where online with a download for a Bitcoin wallet or mining app, malware uploads onto their computer.

Bitcoin Phishing works similar to credit card phishing. A website pretending to be the Bitcoin brand asks the user to put their private key in, and then spends what is in the user’s wallet.

Bitcoin flipping promises to double your investment. You pay a small amount, which is promptly stolen.

Bitcoin and cloud mining pyramid schemes. These can be hard to discern. Some are legitimate. Some are actually ponzi schemes, (like Bitdonix, Bitzilla, Gladiacoin, and Walletpllus, among others), with the money being paid getting distributed up the pyramid, until the whole thing crumbles.




How Many Bitcoin Scams Are There?

To put the numbers into perspective, ZeroFox (a social media protection platform built for enterprises) found 3,618 Bitcoin scam URLs. Then, they measured how often posts containing these URLs were shared over a three week period in early March, and discovered a total of 516 shares averaging 24.53 shares per day.

From the ZeroFox  website, they said that “not all Bitcoin scam posts contained URLs to known scam websites. Some asked for direct contact via DM or phone, some posted URLs we had not yet discovered (but have added since), and some directed post viewers towards URLs contained within their bios or superimposed over an attached image. These were much more numerous, totaling 8,742 posts for an average of about 416 posts per day over the same period of time. Scammers had unique profiles over 68% of the time.

Historically, all curated Bitcoin scam URLs were shared a staggering 126,276,549 times within social media posts. This number was skewed upward by two specific URLs that’ve been shared over 40m times and two others that were shared over 10m times. Excluding these outliers, the Bitcoin scams were shared an average of 5,367 times all-time per URL. The virality of these scams confirms their Ponzi end goals, which are reinforced by the amplifying nature of social networks.”

Cryptocurrency is not only the hot market for illegal activity, it’s also the hot market for ethically gray activities.


How To Avoid Crypto Scams

1. Don’t give your Bitcoin key out unless it’s a secured (https) connection you’re already familiar with.

2. Ignore URL’s attached to social media profiles advertising too-good-to-be-true Bitcoin deals.

3. Exercise caution when dealing with the social media accounts of legitimate Bitcoin brokers. They’re often easy prey for impersonation.

4. Don’t do financial transactions via social media messengers.

Lastly, if you’ve been scammed, report it to the FBI’s Internet Crime Complaint Center, but know that your Bitcoins or money are more than likely gone for good.

Arm yourself in the world of cryptocurrency so that you, too, can come out on profitably instead of as a victim.

here’s the link for fbi’s internet crime complaint center

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January 2019
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