Throughout the ages, wherever there has been gold, there have been pirates who have attempted to steal that gold. Now that cryptocurrency is in essence digital gold, there are digital pirates who will attempt to steal that digital gold, either by hacking or manipulation.
Understanding some of the things that scammers and hackers attempt to do to illicitly obtain what is rightfully yours can help you prevent anything like this from happening to you or a loved one. Most scammers today rely on exploiting your ignorance to obtain money from you. Most hackers rely on your laziness when it comes to security to obtain money from you.
Having a basic knowledge of some of the most prolific methods used by scammers, along with understanding the basics of what cryptocurrency is and how it operates can help you safeguard your cryptocurrency from these digital pirates. Also know that most of these scammers exploit your greed for huge profits, and use that to cloud your judgment.
One way that scammers attempt to steal from people has existed even before cryptocurrency. Many will offer an account manager to trade on your behalf and obtain massive profits for you. They may even come equipped with tons of testimonials, all of which are fake. Cryptocurrency gives you the ability to take control of your finances and even manage your own trades without the need for a broker, so do not fall for this trick.
The most important thing you need to realize is that no one who randomly messages you on any social media or messaging platform is going to magically help you obtain massive wealth. If they had those skills, to begin with, they would not need to solicit other people’s money. Many will throw around the terms account manager, leveraged trading, and binary options to try to describe their trading methods.
More advanced scammers will encourage you to test out with a small deposit and then even send you back some of the money saying it is the profit made from trading. This is to trick you into sending larger sums of money to the scammer. At that point, most will never be heard from again.
A small twist to that scam is that you will be told that a trading bot is automatically scalping the profits for you automatically. Trading bots are a real thing, but most who reach out do not really have trading bots. It’s just another tactic to separate you from your money. True trading bots are not automatic profit makers. They are programmed by humans so many are usually not very profitable, especially if someone does not adjust the trading strategy as market conditions are constantly changing.
Again on this one, I will go back to my earlier statement. There is no one online that is going to randomly message you and allow you to make huge profits just for sending them money. At this point, you may be thinking that what I am saying is basic common sense, but so many are blinded by greed, especially if the scammer is very convincing in what they have to offer you.
The next method has emerged with the popularity of Bitcoin. Fake mining scams also rely on your ignorance of what the process is. Bitcoin mining, and cryptocurrency mining, in general, are legitimate activities and can be profitable, but scammers who reach out to recruit you into a mining pool are not legitimately mining. Another red flag is the massive profit they promise you in a short period of time.
Legitimate mining requires large investments in equipment and also high electricity costs, so profits in legitimate mining are slow to come and usually, mining is not profitable for at least the first year or two. I recently had a conversation with a local bank manager who had a lady come to his office wanting to withdraw $30,000 to send to someone she met online who was going to mine Bitcoin for her.
Thankfully, he was able to explain to her that it was not legitimate, but people fall for this every single day, and keeping your greed in check plus understanding the basics can prevent you from being scammed. If you want to invest in cryptocurrency mining, the only way to do that legitimately is to purchase your own equipment, set it up in your own building, and connect it to your power grid. There are some technical things you need to know for setting up, but you can see where I am going with this.
The last method I will go over is that online scammers will try to direct you to a fake exchange to create an account and deposit. This may sound more secure because you are still “in control” as far as you know, but usually, the entire site is fake and once you deposit, you will never be able to withdraw again. Make sure to only use reputable exchanges for trading, and only keep on those exchanges what you are actively trading. Anything else should remain in a wallet where you control the private keys and hold the seed phrases.
Even legitimate exchanges have been hacked in the past and limited people’s ability to access their funds in their accounts. Many eventually reimbursed losses and gave everyone access to their accounts, but there have been some hacks that have left exchanges insolvent and unable to continue business. If you are in doubt of what exchanges to trust, the Coingecko website, has an exchange tab that gives each exchange a Trust score rating.
Only start with those with the highest rating until you learn more about each one and how they operate. Never join from a link someone sends you or from a google search result. Scammers will make fake websites to mimic the legitimate ones and even have them rank higher in Google results than the legitimate site, at least for a short period before it is reported.
As you venture into the world of cryptocurrency, make sure to take the steps to educate yourself and protect yourself from these types of scams that can cause you to lose your money. Many of your friends and family may know much less than you about cryptocurrency so share this article and other educational tools, like the Newscrypto platform, with them so they are protected from falling for these scams. Unfortunately, many will have their first experience in cryptocurrency as being scammed by one of the methods listed above or others and have the false ideas that cryptocurrency is a fraud.
Cryptocurrency is the greatest revolution of money, finance, and freedom, but there are bad actors trying to separate people from their money. Sharing this info with others can help prevent plenty of heartache in the future.
Content written by Blockchain Wayne and NewsCrypto Team