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Guest Post

A Guide to Identifying and Avoiding Bitcoin Scams

Bitcoin was introduced as a unique and innovative way for people to trade online without the trouble of going through an intermediary or a hungry broker. Even though the whole process of Bitcoin trading is supposed to be made transparent through the Blockchain, the user on the other end can choose to remain anonymous. There are no verifiable or identifiable addresses that can be tracked. This makes Bitcoin prone to scams and fraud, hence its infamous reputation. However, with a quick and simple guide, one can easily identify and avoid serious Bitcoin scams.

Identifying Bitcoin Scams

Sometimes a person will claim that they have your personal details and try to extort you into paying them in Bitcoin currency. This usually happens when you click on links containing malware or ransomware. Scammers can often use emails to send you links that you may be tempted to click or follow. The blackmailer then uses the link to hack into your system and gain access to your personal data. Skilled ones may even claim to have access to your webcam and hold some impressionable material over your head as a means to extort money.

At times fraudsters impersonate a well-known person or entity to lure people into revealing their personal information. They will then use that information to commit identity theft. The scam artist can often contact you via a direct or personal message from an account that looks very nearly like the person they are impersonating. By offering you free giveaways or an exciting offer of high returns, they can make you reveal your details.

Another way scammers often adopt is a pump and dump scheme wherein they attempt to defraud people is through tempting them to buy Bitcoin by claiming to know what the price of the stock will be over the next few weeks. Once the price is driven up by people buying Bitcoin all of a sudden, the scammers will then dump their currency for a sizable profit.

Avoiding Bitcoin Scams

Bitcoin scams may be easy to fall victim to, however, they are even easier to spot and thereby avoid. A person familiar with internet scams can easily avoid bitcoin scams too. Always make sure that you visit crypto websites or exchanges by entering their URL in your browser’s search box. Never click on links provided in emails or adverts; they may look legitimate on first sight but a malicious link is hidden underneath the hyperlink.

Your best identity theft protection can be thorough ID verification. A lot of crypto companies now check their users’ identities through KYC verification services, which allow them to weed out any posing fraudsters. Identity verification services can take the form of face verification, document verification or even a simple two-factor authentication process.

Never trust anyone claiming to know what the price of a cryptocurrency will be. Trends in cryptocurrency or even a stock cannot be predicted without substantial knowledge of the market trends by expert individuals. Even then, a lot of it is just guesswork. Through some discretion and some well-rounded research, one can avoid any sort of scams or frauds altogether.

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