The digital asset realm is packed with financial innovation, but it is unfortunately shadowed by a persistent threat: malicious actors. A Bitcoin investment scam or Ponzi scheme is just one of many traps in the world today. At Remitano, we prioritize your trading safety and believe that proper education is your strongest weapon to detect a scam before it can harm your portfolio.
Finally, we have cryptocurrencies. As a brand new sector of the economy and a new type of money, it is clear that it is full of scammers. People don't have the proper education when it comes to crypto coins; thus, it is easier to trick them. Also, the Blockchain is global, so the pool of potential victims is considerably larger than in other industries.
Bitcoin, as the oldest cryptocurrency and network, has a rich history of fraud. One of the most common is an investment scam, which lures people with little understanding of the economy, finance, or crypto coins and promises them high return rates that would be unreasonable in any other circumstance.
So, in this article, we will do an overview of the most common scams in Bitcoin. After you have become aware of how these types of scams operate, you will be able to avoid any fraudulent investment platforms.
Bitcoin Investment Bots
Source: Newswire.net
Cryptocurrencies and Bitcoin, in particular, have opened trading to the broader public. This is because to use BTC, most people have to exchange it for their local money. This has resulted in an insane demand of exchanges that operate with Bitcoin and other altcoins.
As the exchange business evolved, many began developing automated trading algorithms to give their clients an advantage. These are great services and are very useful for those traders that know how to use them and understand their limitations.
Sadly, the general public does not know how these machines work and believe they are some sort of "get rich quick scheme." Many instances of a crypto scam have taken advantage of this ignorance and advertise their services as a deposit BTC, forget it, and become wealthy doing nothing. They claim high rates of return for crypto deposits that supposedly are being invested by their state-of-the-art trading bots, working 24/7 on behalf of the users.
Once a person has deposited BTC on the platform, he can see the supposed profits growing regularly. After a while, when the person tries to retrieve his 'gains,' the fake website refuses to complete the transfer or just locks up the account.
One of the most famous cases of this type of fraud is Profitcoins or Max Profitcoins. We suspect that the same people are running both sites, with both claiming to be BTC trading platforms that offer high returns and instant withdrawals. Well, neither turned out to be true, as users reported having their BTC locked, error display when trying to withdraw funds, and being locked out of their accounts after a while.
The sites lured clients by claiming that famous football players such as Lionel Messi, Cristiano Ronaldo, and others were using Profitcoins. The scam sadly lasted for more than two years. They took it down in 2019. It is unknown how much Bitcoin these scammers were able to steal, but some estimates place it in the thousands.
An automated trading algorithm is not a magic money-making machine. The models these programs used are not 100% accurate, so users can't make a profit all the time. In fact, if the bot is working with the wrong historical data it can easily lose money. These are very difficult-to-design programs, so their prices are often in the thousands of dollars.
Never trust a platform that claims to offer trading bots free. Always search and read reviews on these products and only use those that have the most traction. As in anything crypto, if it sounds too good to be true, it often is.
Bitcoin giveaway scam
Source: news.bitcoin.com
A common, and now infamous type of scam that mainly runs on YouTube, fake giveaways are everywhere. Recently, an important personality has been frequently displaying YouTube ads in which they claim that they will double any amount of BTC or other cryptos you send to the wallet listed.
Many may think this is a ridiculous fake giveaway and only fools fall for it, but that is not the case. The scammers often steal accounts that have a long history on the site and already have subscribers. Second, they use public personalities that have long been associated with BTC and crypto. Both of these factors are enough to convince a large group of people looking for easy profit.
Perhaps the most famous example of this is the recent twitter hack which saw the accounts of prominent personalities hijacked for this type of fake giveaway. The mechanics were the same as the YouTube scams that were already known, and yet, thousands fell for them.
The first step to avoid these traps is to assume they are all fake. Then, carry out adequate research using sites such as Bitcoin Abuse for the latest updates on malicious tricks in the crypto world.
Fake Bitcoin exchanges
Source: cryptoincome.io
On this type of scam, they create a fraud site using the same design as the original to trick people. The victims unaware of the fraudulent nature of the site deposit their BTC and are never able to recover it.
A good way to avoid this layout is never to use the links provided on a post or the video's description. Instead, copy the information and use a search engine to access the site. The chances that a reputable search engine will lead to a fake clone site are tiny.
Second, check the security information that is displayed as a lock before each URL. These certificates are proof that a site has been properly registered and is secure. If the certification does not appear, close the website immediately.
The world of cryptocurrencies is full of opportunities to make a profit or start a new career. We are at the early stages of an economic revolution. Sadly this means scammers will take advantage of unsuspecting people. An excellent way to avoid a scam is to buy your Bitcoin from a safe and proven source, so find out how to buy bitcoin in Nigeria using Naira.
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