The cryptocurrency market is seeing a great boom. Not to mention the fact that the current pandemic has made cryptocurrencies even more attractive than before. You are looking for a way to spend money without touching money? Well, is there a better way of doing that than exchanging through cryptocurrencies? In addition to that, there are many other blockchain based solutions coming to the market that will change a lot about how the things are operated today. However, among all the great news, there is some bad news as well.
There are more bitcoin scams on the internet than you might realize. They are looking to make you spend your money in one way or another. Today, you will get to know each and everything about bitcoin scams, what they look like, and how you need to stay away from them. Let’s get right into it.
Bitcoin Scam Format – The Two Dark Motives
When a bitcoin scam approaches you, it has one or two motives behind its perpetration. Neuercapitalscam talk about them both.
1. To Make You Spend Your Bitcoin
In this type of scam, you are asked to spend the bitcoins you have in your wallet. There are many ways for online scammers to know that you own bitcoin. In fact, many of the websites that you visit thinking they are legitimate are keeping a tap on you. For example, you might have visited the website of a scam broker. The mere fact that you tried to sign up on the website shows that you do have bitcoin. The broker might forward your contact details to some shady person and they might contact you through email to make you spend your bitcoins.
2. To Make You Money to Get Bitcoin
Scammers around the world understand the people are after bitcoins. Everyone who has even little knowledge of the cryptocurrency market knows more about bitcoin than any other cryptocurrency. Everyone knows that bitcoin is a valuable currency and that getting their hands on even one bitcoin is enough to make a fortune. In an attempt to do that, people are looking for any opportunity they can get their hands on to make money. That’s where the scammers come in. They tell you a secret way of making bitcoins. However, they will always ask you to spend some money beforehand. And that’s where they dupe you out of your money.
Bitcoin Scam Format – The Many Faces of the Scam
You can get scammed in the name of bitcoin in a variety of ways. For that very reason, you have to be extremely careful how you browse the internet and spend your money online. It is best that you do business with only reputable an established businesses. Leave the experimentation to others if that’s what makes you feel a bit content. So, here are some of the common faces of the bitcoin scam.
● The COVID-19 Email
This particular scam has just started to circulate around the world. The pandemic has stopped the world and people are sitting in their homes hoping for some miracle to happen and the virus to disappear. There is no doubt that people are scared, especially after the most developed nations of the world have completely failed to save their people from this contagious disease. However, scammers still believe that this is a great time for them to play with people’s fears and make them spend money. They send you email with the term “COVID-19” or “Coronavirus” in it. Such a subject line gets your attention instantly.
You click on the email and there is someone threatening you to send them your bitcoin. What happens if you do not send the bitcoin to them? Well, they will come to your house and spread Coronavirus. Perhaps, they will sneeze at your doorknob. Who knows what they have in mind? The point is that they are trying to scare you. Of course, the nature of this virus is such that people are instantly scared. They know that someone sneezing on their doorknob is enough for them to spread this disease. Some people get blackmailed by such emails and send their bitcoins to the scammer.
● The Useless Altcoins
This has happened more often than you may realize. Millions of dollars have been lost in the hands of this particular scam. So, if you already do not know how the world of cryptocurrencies works, here is some enlightenment for you. Just like companies have their IPOs, cryptocurrencies have ICOs when they are launched. The term ICO stands for Initial Coin Offering. This is the event in which a new company that has created a new cryptocurrency wants your investments in the form of the major cryptocurrencies. So, they ask you to spend your bitcoin or ethereum to buy their tokens or coins.
What they promise you is that their coin will become very valuable in the future and that’s when you will get the value for the investment you are making today. In reality, their coins and tokens are nothing but bogus. They do not mean anything and there is no company with any plan to launch a cryptocurrency. They collect millions of dollars from people from around the world and disappear without any trace. You cannot even search them anywhere because all the profiles they have on social networking websites are fake with fake pictures and details.
So, it highly recommended that you spend time to research before you put your money in a particular altcoin. The best thing is to wait before spending your money. There is nothing wrong with joining the party late when the party was all about who loses the most money. If you do not know about scam ICOs, you might want to read about Benebit, Bitcard, Plexcoin, etc.
● The Computer Hijack
There is some reality to this one. It is not even a scam. It is a criminal act in its purest sense. So, you know that ransomwares have been around for many years. When a ransomware attacks your computer, your computer becomes useless for you. You cannot access anything because you have been locked out of it. How do you get back in? Well, you just have to wait for a message to appear on the screen of your computer. The message tells you that you have to send some money to a particular bank account without telling anyone if you want access to your computer back.
In a bitcoin scam, they will ask you to give them any bitcoins that you own to get access to your computer. If you have any personal information stored on your computer, you would want to get access to it as soon as possible. The best way to beat this scam is to have a copy of your drive in the form of an image backup at all times. If you have a backup of your computer stored on a different location, you can literally laugh at the scammers when they ask you for your money.
● Phishing Scam
This is one of the most sophisticated forms of scams out there. In a phishing scam, you are made to land on a website or email that you think is legitimate. For example, you might think that you are on your Facebook page and enter your login details when in reality, the page you are on is a phishing website. It impersonates as the website that you normally use but it is not that. The scammers are laughing in the back as they collect your details when you enter them. They can send you phishing emails asking you to click on a particular link. When you click on that link, they collect your personal details and then they can do whatever they want to do with that information.
● Bitcoin Trading Scam
Let’s talk about the latest type of scam, which has caused many to spend their money thinking that they will be rich in no time. In this type of scam, you are asked to create an account on a software. When you create that account, you are told that you will make money through bitcoin trading. You do not have to do anything, it is the software that makes all the decisions. So, in some time, the software will have made you thousands of dollars. Wait for a month, and you will become a millionaire soon.
While the pitch sounds very clichéd and old, there is no doubt that when they attach the word “bitcoin” with their name, a lot of people come and get trapped in the scam. That’s because people are searching for bitcoin all around the world at all times. Many of these people are illiterate about trading. They do not know how trading works or have any idea of what bitcoin. As soon as someone tells them that they can make money through cryptocurrencies, they trust them. You can say that these scams work mostly on people who are looking to change their lives, become financially stable, and have no clue of how bitcoin works.
● The Fake Exchange
Once again, this is a scam that has made people lose millions of dollars in the past. If you do not know much about bitcoin and any other cryptocurrencies in particular, here is some crash course for you. If you want to own bitcoin or any other crypto coin, you have to purchase it. How do you purchase the coin? Well, you will have to go to the exchange just like you have to when you want to exchange your currency for dollars or vice versa. But there are no exchanges in your area that will accept your money and give you bitcoin. So, you then have to go to the online exchanges.
These online exchanges are available in abundance today because of the popularity of cryptocurrencies in recent years. So, you go to the exchange, spend your fiat currency to buy bitcoin. The exchange accepts credit cards and many other methods of payments. Now, after you have purchased a crypto coin, you have to find a place to store it. Since they are digital currencies, you have to find a place for them in the digital world. Well, you have that place available right on the exchange. That’s where you make the biggest mistake.
Many people put their newly purchased bitcoins and other cryptocurrencies in the wallet available on the exchanges they purchased the coins from. After some time, the exchange disappeared and the money of the traders too. These investors were never able to know where their money went. And they did not have anyone to sue because the exchange was a scam from day one.
The Typical Bitcoin Scam Format – Bitcoin Trading Scam
Since bitcoin trading scams are the most common ones these days, let’s talk about them. Let us explain what they look like, what their common features are, and how they work.
● The Pitch
The first thing you get to see is the pitch from the person who has created the bitcoin scam. The pitch is usually in the form of a video. The most common thing you will notice about these videos is that you will never see the person who is talking. The video is usually a slideshow with a voice in the background. Why would the scammer want to show his/her face anyway? At the same time, you are usually told that you have to watch the video and make a decision as soon as possible because some government agencies are after the creator of the video and the video will be down in no time. Only that you come back to the same page after a week and the video is still there.
You can receive the link of the website in a variety of ways. You might receive the link from one of your friends on social media. Do not suspect them straight away. They might have gotten the link from someone else too. In other scenarios, you will end up clicking on an ad that appears on some low-rank website. The website that you land on is usually a one-page website. The top of the web page has the video, and the rest of the page explains how you can make a lot of money.
● The Software
An interesting thing about these scams is that they always tell you about a particular software that can help you make a lot of money. Usually, the story involves a software developers who used to work for a company. The company’s boss asked the developer to create a software for the rich guys to invest money in bitcoin easily. The developer created the software and then realized all of a sudden that he/she had created the Holy Grail. After realizing that his/her software can help him make thousands of dollars, he/she blocked the software for the rich and came to the poor people to help them make money.
So, the creator of the software is trying to promote that he/she wants to help financially troubled people make money in an easy way. The software is easy to join and there is no money to be paid for the signup.
● The Bot Trading
So, joining a software to make money does not sound that fancy and striking, does it? Well, here comes the biggest hook to catch you. The developer tells you that the software acts like a bot trading machine. You just have to sign up on the software and then put it on autopilot mode. When the software is on the autopilot mode, it will make you money fast. The weird thing is that you never get to know what type of algorithms the software is using to make you money and how you will define to the software what types of trades you want to enter and which ones you want to avoid.
The most ridiculous thing that you are told is that the software is always right. Yes, it was customers first, but now it is the software who is always right. So, the developer tells you that with some miraculous coding, he/she was able to make the software predict every trade correctly 100% of the times. This is as ridiculous as it sounds. There is no software in the world that can predict trades 100% correctly. Keep in mind that no matter how sophisticated the algorithms are that the software is using, they have still been created by a human being.
If a human can create an algorithm to detect the movement of asset prices with 100% precision, then this human does not have to create a software for it.
● The Signup Process
The signup process is where the scam starts to fall apart. That’s where some things are revealed to you that do not make any sense. So, you were promised that you will not have to spend a penny to sign up on the software, but now you are being asked to make a small deposit in your account. Yes, it is at this point you realize that you are opening a trading account that you open with online brokers. With most online brokers, they require you to deposit a minimum of $250 in your account to start trading. Guess what the software asks you to do? Well, it asks you to deposit $250 in your account to start trading.
Once you have deposited funds in your account, you even get to choose from many brokers that are available online. At the end of the day, you end up signing up with an online broker and opening a trading account that you do with brokers usually.
Don’t Be Impressed by Instagram Scammers
A lot of the times, there are people who promote such softwares only to make money from you. Keep in mind that pyramid schemes have not gone out of fashion. They were always there and they keep robbing people of their money to this day. So, there are people who ask you to start trading so you can make money like them. They then show you their statements with lots of money in their accounts. The problem here is that people who have a lot of money in their accounts never show their account statements to anyone.
You must have seen how lottery winners are announced. Most of the time, people do not want their picture to be taken because they know that people would come after them after knowing that they have this much money. In a similar fashion, people who have a lot of money in their accounts, albeit through trading, will never disclose that information to you in any way.
So, a recent trend is that young people have started to create their accounts on social media and fool young people into believing that they can make millions from their homes too. Well, yes, there is a possibility of making millions from your home but it is not easy. It requires a lot of effort and only a few are able to put in those efforts. So, you will see a lot of young boys and girls posting amazingly colorful pictures of them close to their private planes and on their favorite red Ferraris. They usually tell their followers on social media that they made money through trading.
In reality, they have not made money through trading. They have been hired by the creators of scam to market for them. It is easy to fool young people because they have lots of dreams of being rich. So, if you see someone on Instagram, where this scam is common the most, just keep away from them. They do not make a lot of money and if you ask them for proof, they will either run away from you or block you.
There should be no doubt in your mind that trading bitcoin can make you a lot of money. However, you still have to opt for only the legitimate ways of making money. Whenever you notice that a method of making money is unbelievably easy and requires no effort, you should immediately walk away from it. Keep in mind that thinking too much makes you do things you do not want to do. So, when you sniff a scam, walk away from it instantly.