To learn about the cryptocurrency world, you can read knowledgeable articles and books. Likewise, to stay safe from scams in this field, you should educate yourself on the common mistakes scammers make.
A cryptocurrency scam is a type of fraud that takes advantage of the buzz around cryptocurrencies. It involves someone promising an investor that they can earn a high return on their investment by investing in cryptocurrencies without any risk attached.
Most often, these types of scams take place through social media platforms such as Facebook, Twitter, and Reddit. More experienced scammers can also use direct mail solicitations to target victims who are most likely to fall for the pitch if they are not careful.
How to Avoid Cryptocurrency Scams
Cryptocurrency is a buzzword that’s been in the air for quite some time now, and while it may seem like a fad to outsiders, plenty of people exist who aren’t so quick to dismiss it. Cryptocurrencies have been gaining momentum at such a rapid rate lately that one could argue they are becoming more than just the latest trend.
If you plan on investing or trading in cryptocurrency, you will want to know what precautions are vital against scam projects and fraudulent ventures.
The easiest way to avoid cryptocurrency scams is by sticking to real blockchain companies. The ones with
- Solid teams were involved.
- Reputable advisors are available for consultation.
- An active social media presence on platforms like Facebook and Twitter.
- A well-designed website with an active blog
Any company with all these elements will be happy to provide you with additional information upon request. If you would go the extra mile with your due diligence research, consider looking over their whitepaper before getting involved.
Research the team behind the project.
These pages also contain contact information like phone numbers and email addresses that can come in handy if you have additional questions about their project.
You can find it helpful to reach out to these people or teams directly via social media like Twitter or Facebook from time to time for updates. In addition, if you notice any major changes in the roadmap or team makeup, you should reconsider investing in them until such changes are confirmed.
Warning Signs of a Mining Scam
It can be via vague user agreements or no contact information on their website. Even if they have a physical location posted on their site, it can just be an address that leads nowhere. Another red flag is if they require an upfront payment to participate in cryptocurrency mining or trading with them. It can be a scam if they promise high returns and then disappear with your money before you get any gains from the investment or transaction you have worked so hard on.
Cryptocurrency scams are real and will continue to persist as long as people fall victim to them. The best way to ensure you don’t become one of these statistics is by educating yourself on how these schemes work and what signs should make you hesitant about investing in something like this.
Beware of fake apps.
Cryptocurrency scams are a big issue, especially among those who don’t know much about these apps. If you are new to cryptocurrencies, it can be hard to tell whether the app you download is legitimate or not.
The best way to avoid this problem is by checking the number of downloads and reviews before downloading an app. Once downloaded from an official source, keep your mobile phone’s security turned on. If you feel like something’s fishy about a cryptocurrency app, throw it away immediately and download something else.
Do your research.
Recently, ICOs have become all the rage. These companies go out of their way to generate hype and buzz for their projects by creating social media accounts. They carefully craft elevator pitches designed to convince investors that their project is worth investing in.
While most ICOs are legitimate, there has been a distinct rise in scam ICOs. To avoid getting scammed, you should do your research before investing in an ICO.
To start, make sure you do not visit the company website or its social media pages. You can do it from a computer network where other services, such as Facebook or Google, are not open. There can be some malicious code on these sites, or they can get compromised. Therefore, giving beneficial information to hackers who wish to steal sensitive data such as login credentials and credit card information
Another vital step is to check out their whitepaper. Whitepapers contain important details about their project, including financial information and team members’ skill sets. These will help you decide whether or not it’s worth investing in the cryptocurrency of your choice that they claim they want to create based on what they’ve written down in the whitepaper.