It does not really take long to realize that there is risk involved in the new digital monetary systems known as cryptocurrencies. We’re not even discussing market volatility. Scams abound on the internet, and bitcoin exchanges are no exception. Be conscious of the risks of losing your bitcoin investments when you consider investing in various firms and exchange platforms.
Below is a glance at some of the most prevalent cryptocurrency scams and how to avoid becoming a victim as you dive into the exciting future of bitcoin.
Five Methods for Detecting Legitimate Cryptocurrency Coins
Here are some simple criteria that investors can use to distinguish between phony and legitimate virtual currencies:
Look for the Website and Whitepaper of Project
This is the most reliable method of determining whether the cryptocurrency you’re investing in is authentic. Each token has a whitepaper that explains all of the underlying foundations and technologies that went into the creation of the blockchain that supports it. It can be accessible on the blockchain developer’s official website.
Most real tokens reveal the token name, creator address, contract source code, and other vital characteristics for transparency. If any of these are absent, it’s important to be cautious.
Track the Developers
It’s critical to learn everything you can about the artists. On social media, there should be plenty of information about them. If the creators are unknown, there is grounds for concern.
Keep an Eye Out for Impostors
It’s also common knowledge that investors value the advice of well-known figures.
Scam artists frequently construct bogus videos featuring well-known people and use incorrect information to deceive investors. In such circumstances, digging further is frequently beneficial. Investors should follow information back to its source to ensure its accuracy.
Be Wary of Promises of High Returns in a Short Period of Time
Every investor should keep in mind that any investment will appreciate in value over time. Furthermore, there are volatile cryptocurrencies with large price swings. Scammers take advantage of these characteristics and offer unbelievable returns in a short period of time. Fraudsters commonly employ phishing emails and social network handles to lure in unsuspecting first–time investors.
Keep an Eye on the Web Addresses
The majority of fraud incidents involve untrustworthy websites. It is hazardous to visit a website if a ‘lock icon’ doesn’t quite appear in the address bar next to it. Also, make sure the URL begins with ‘https’ rather than ‘http,’ as the latter is insecure.
Because the difference between the letter ‘O’ and the number ‘0’ is difficult to discern, phony site URLs may utilize the letter ‘O’ and the number ‘0’ alternately. To avoid being cheated, you must be vigilant. Taking a cautious approach may take more time, but it can save your life.
4 Cryptocurrency Scams to Watch Out For and How to Avoid Them
The most prevalent crypto scams are listed below, along with tips on how to avoid becoming a victim.
Imposter Websites
Even if you are following a good suggestion from someone with a lot of experience, you can still become a victim by accessing a bogus website by accident. A surprising amount of websites have been created to look like legitimate startup companies. Think twice if there isn’t a small lock icon near the URL bar signifying security and the site address doesn’t begin with “https.”
Even though the site appears to be the same as the one you thought you were visiting, you could be sent to another one.
Apps That Aren’t Real
Scammers also use bogus apps accessible for download on Google Play and the Apple App Store to deceive cryptocurrency investors. Although stakeholders can typically immediately identify and delete bogus apps, this doesn’t imply the apps aren’t having an influence on many businesses.
Although Android users are at a higher risk, every investor should be aware of the possibilities. Are there any glaring misspellings in the copy, including the app’s name? Is there an inauthentic look to the branding, such as odd colour or an erroneous logo? Take note of this and think twice about downloading.
Bad Tweets and Other Social Media Updates
Don’t believe offers from Twitter or Facebook, especially if the outcome appears to be unattainable. Fake accounts can be found all over the internet.
If you provide someone on these networks even a modest bit of your cryptocurrency, you’re unlikely to get it back.
Don’t assume that just because others are responding to the offer, they aren’t bots. You must exercise extreme caution.
Email Scamming
Even if it appears to be an email from a respectable cryptocurrency organization, proceed with caution before investing your digital money. Is the email exactly the same, as well as the logo and branding? Are you able to confirm that the email address belongs to the company? One of the reasons it’s crucial to choose a company with real people working for it is the opportunity to check on this. Ask someone who works there if you have any doubts about an email. Also, never go to a website by clicking on a link in an email.
Final Thoughts
The cryptocurrency industry is a hive of activity, with new coins launching nearly every month. As of December 3, there were around 8,711 cryptocurrencies in the $2.61 trillion crypto market.
However, the enthusiasm is making it more difficult to verify the genuineness of crypto tokens, and investors are frequently duped.
One such example is the Squid Game token. The currency, which was established in response to the massive popularity of a Netflix program with the same name, turned out to be a rip-off. The Squid Game token soared and plummeted in the first few days after its launch, with the developers fleeing with millions of dollars in tokens.
The fear of missing out (FOMO) effect in crypto markets is a snare for unsuspecting investors who invest in speculative currencies with no basics without doing their homework.
Red flags, on the other hand, can alert investors to potential scams. The most important part, like with any investment, is thorough study and reliance on only credible information sources.
