Bitcoin prices are constantly increasing over the years and have reached huge market capitalization worth hundreds of billion dollars. Bitcoin is attracting people for its specific attributes like price appreciation, demand, appeal, significance, and value.
This brings good and bad people in the field. The bad part is scammers in huge number. They also yearn to profit somehow from bitcoins’ popularity but with evil intention. People are losing bitcoin because evil scammers are targeting unprepared and innocent victims.
We will discuss few most common bitcoin scams and how can you spot them.
Fake bitcoin exchanges
Scammers mostly use social media to attract their victims. You may see an advertisement “Buy bitcoin for 5 percent under market value. Save big”. This is one of the tricks so that you visit their fake exchange. So be alert whenever you visit any site, see to it that it is secured that is “https” and not “http”. Check for that “s” at the end, https means that web traffic is encrypted and secured.
Another warning sign of fake exchange is selling bitcoin through PayPal. The sites will display a web form where you will have to enter your PayPal email and the amount you wish to sell. Once you submit a QR code which will be displayed where you want to send your bitcoin to. Once you are over with it money never arrives.
One thing to note is, that most of these fake exchanges are there for a day and disappear the next day. They will pop up and disappear quickly and then may re-surface with a different domain name later. To ensure safety, visit only the real bitcoin exchange. It is better to type URL manually in your browser instead of clicking the link.
Fake bitcoin wallets
Spotting fake bitcoin wallet is tougher than spotting fake exchanges because the main function of the wallet is storing and not buying or selling. It has more to do with your money than the software you use. Fake bitcoin wallets infect your machine with malware and steal your private key or password. There are different wallets for desktops and mobiles.
Many fake wallets try to resemble like the original one. So look out for original wallet which is secured and web traffic is encrypted, that is https and not http.
It is one of the most common scams. When someone tricks you about visiting a true website but actually it is a fake site.
Normally phishers contact you through email or fake web advertisement. You unknowingly visit their fake site, assuming it to be genuine and get malware in your system or lose your bitcoin through a fake sale.
Phishers use email as a bait to lure you into their trap. You may receive an email (spoofed) from your exchange or wallet, usually from past database hacks. These emails are available in the grey market through hackers. The best thing to do is not to click on any hyperlink in an email or open unknown attachment. Better to go directly to that webpage where you have to business instead of going through links. You can always check the source of email before opening it. The best way is not to visit any sponsored advertisement and type manually the real address which you want to visit directly into your browser.
Other scams are ponzi scam and cloud mining scam.