Online scams are as old as the internet itself. The large educational and generational gap between the young and old has given rise to fraud in the world of finance. First, we saw it happen with cheques and credit card payments; these eventually became too hard to outsmart. Nowadays, cryptocurrency fraud is booming and exists in all different forms. The more people choose to buy Bitcoin, the more creative these frauds become.

In this article, we look at the progress of Bitcoin, how it fuels scammers’ creativity, and what you can do to avoid falling victim to such practices. Let’s delve in.

There are many different types of cryptocurrency scams. You may or may not have heard about them during your crypto journey. Let’s offer a short summary before we proceed:

Aside from small-time scams like the ones discussed above, many groups organise heists from exchange platforms, getting hundreds of millions of dollars through stolen value.

The examples are too many to count. MTGox being the first. The massive NEM hack. Even the recent 2010 Binance hack, where bad actors claimed more than a hundred million dollars in Bitcoin value.

The good thing is that there are now systems in place to “taint” stolen funds, making them impossible to sell on exchange platforms of all sorts. There is also an active effort to whitelist as many addresses as humanly possible, to track stolen funds easier. Overall, the industry seems to be more regulated than before, and the hacks are decreasing as a result. However, there is still a lot of fraud-related activity on decentralised exchanges since there is no way or reason to control the platform’s safety. For some, this is good; for others, it can cost them their life savings.

Each type of scam will naturally require a different approach when it comes to protection. The first thing you can do is effortless: Never click on anything you don’t understand and NEVER EVER give out your personal information to anyone you do not know. This includes your wallet address, private keys, pin code, 2FA, or exchange passwords. In most cases, scams work due to the user’s voluntary participation who does not have a clear understanding of the process.

The second thing you can do is research – Tons of it! When you come across an email that asks for your personal information, Google the sender’s email address and see if anything comes up. Exchanges and crypto wallet companies will never ask for your personal information.

When it comes to the coins you want to invest in; whether that is an ICO or a small-cap altcoin, research is equally important. Read up on the project’s fundamentals, the whitepaper, and watch any videos or podcasts where the team participates. No information on the team? Then it’s best to stay away.

Finally, the best way to protect yourself from scams is to keep a level-headed approach. Use your logic when trying to understand a situation you come across. Is a password essential? Is this update mandatory? What about the risks associated with investing in a cryptocurrency that is obviously a pyramid scheme? Emotional intelligence helps you make better investment decisions and leads to more profit over time.

The post Does the high price of Bitcoin attract the attention of fraudsters? appeared first on Coin Journal.

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