How to Spot a Bitcoin Scammer? Invest with your eyes open

Scams involving cryptocurrencies can take many different forms. Scammers are after your cryptocurrency just like they are after the money in your bank, and they will do anything in their power to get it.

It is useful to be aware of when and how you are being targeted by fraudsters and what to do if you have reason to believe that a particular cryptocurrency or its key technology is fraudulent in order to preserve your cryptocurrency assets.

Cryptocurrency scams aren’t hard to spot if you know what to look for. Cryptocurrencies that are not scams have their disclosure information readily available. This disclosure includes details of the blockchain and any associated tokens.

White paper

A progression can be seen in the development of cryptocurrencies. Before this procedure takes place, there is usually a document known as a white paper that is made available for public viewing.

This article specifies the conventions, and the blockchain specifies the formulas and describes how the whole system will work.

The people behind fake cryptocurrencies write “white papers” that are poorly constructed, have data that just doesn’t add up, tell readers when they imagine the currency will be used, or generally don’t seem like a real white paper. Counterfeit coins do not do this.

Create members

The members and designers behind a cryptocurrency should always be identified in the white paper for that cryptocurrency. It is possible for an open source cryptocurrency project to lack named developers in some circumstances; Nevertheless, this is common with open source software.

You can examine most of the code, comments, and conversations on either GitHub or GitLab. For conversational purposes, certain initiatives use online forums and programs such as Discord.

It is quite likely that this is a scam if you are unable to find any of these things and also the white paper is full of inaccuracies.

“Free” items

As a trader, we know that each one of you must be looking for free rewards, coins or even discounted offers. And this is the point where you fell victim to the scammer’s fish trap. Scammers always strike a nerve as they trigger the impulsive personality of travelers whom they tend to control via their false claims.

There are many scams involving cryptocurrencies that promise to “drop” money in your wallet or offer free coins.

Remember that nothing, not even money or cryptocurrency, will ever be given to you for free. We all know expectations hurt.

So just curb the habit of setting high bars for buying stocks and not your hopes. Since you are here to trade coins, not your feelings.

Marketing

Investing in cryptocurrency in most cases does not provide financial gain. They are initiatives that have a mission statement and currencies or tokens to be used to facilitate the operation of the blockchain.

Cryptocurrency projects that are legitimate will not use social media to promote themselves as the next best cryptocurrency that you really shouldn’t miss.

You may come across cryptocurrency updates that discuss developments in blockchain technology or new security steps being taken, but you should be wary of alerts like “$14 million raised” or connections that give the impression that they are more concerned with money than they are . with advances in the technology underpinning the cryptocurrency.

There are legitimate firms and trading assistance systems like bitcoin trader to help traders via the integration of blockchain-based principles to achieve safe and sustainable profits. They may have currencies that can be used in their distributed ledger to pay processing fees, but the marketing should appear much more official.

They will have the financial resources necessary to pay for celebrity endorsements and appearances, and they will make all relevant information readily available on their respective websites. These companies will instead promote the blockchain-based services they offer rather than asking customers to acquire their cryptocurrency.

The bottom line

The current frenzy surrounding cryptocurrency investments has caused many individuals to be reminded of the Wild West. It is inevitable that fraudsters will continue to focus their attention on the cryptocurrency ecosystem as it continues to expand and become more complex.

Scams involving cryptocurrencies often fall into one of two categories: those that include social engineering to obtain sensitive account or security information, and those that involve convincing a target to transfer cryptocurrency to a digital wallet that has been compromised.

You should be able to recognize a crypto-related hoax early and prevent it from happening to you if you understand the common methods scammers use to steal your data (and ultimately your money).

Image by Sam Williams from Pixabay