Top 5 Common Cryptocurrency Scams and How To Avoid Them

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Cryptocurrency is a relatively new technology, but the space has already been fraught with scams and thefts. Hacks, ponzi schemes, and exit scams have cost investors hundreds of millions of dollars.

Here are five of the most common cryptocurrency scams and how to avoid them:

Cryptocurrency is a novel idea that has piqued the interest of many all over the world. As an investment opportunity, it can be truly promising. However, as with any other investment opportunity, there are also risks involved.

This is especially true in cryptocurrencies given the volatility that they have shown throughout the years. While working to improve their reputation and legitimacy, cryptocurrencies have attracted more than just investors.

Many criminals and scammers are now taking advantage of this technology to scam people out of their money. In this article, we will discuss some common cryptocurrency scams and how you can avoid them.

With the rise of cryptocurrencies, many people have started to invest their money in Bitcoin and other altcoins in the hopes of making a quick buck.

Unfortunately, this has also attracted scammers who are trying to take advantage of newcomers in the space.

In this article, we will go over some of the most common scams you may encounter while trading crypto and how to avoid them.

Phishing Attacks:

Phishing attacks are nothing new to the internet world. You’ve probably encountered one or two or a thousand emails that attempt to trick you into giving away your login credentials. A phishing attack is when a scammer sends you an email pretending to be from a website/ company you are familiar with (e.g. Coinbase) and tricks you into entering your username and password onto a fake website which is actually controlled by the scammer. Usually, these phishing emails contain misspellings or other grammatical errors that should tip you off that it isn’t legit but if you aren’t paying close attention, it really does look like it could be real!

The best way to avoid getting caught up in this scam is to always make sure you are on the correct URL for any site that requires your private information. Before entering

In 2017, the cryptocurrency market capitalization rose from 18 billion USD to over 600 billion USD. And in 2018, cryptocurrency and blockchain technology has come further and is now starting to achieve mainstream adoption.

As with every new industry and financial mechanism, there are those who choose to take advantage of the naivety of newcomers for their own benefit. In this article, we will be discussing some of the most common cryptocurrency scams and how you can avoid them.

Fake ICOs

An ICO (Initial Coin Offering) is a way for new cryptocurrency projects to raise capital to fund their project development. The vast majority of ICOs are built on Ethereum’s blockchain due to its smart contract functionality. A smart contract is a contract that executes automatically when certain conditions are met without any third-party interference.

The project releases tokens which can be purchased with other cryptocurrencies such as Bitcoin or Ethereum. These tokens often give you the right to vote on decisions within the platform, access premium features or receive payment in the form of dividends.

This new method of fundraising has quickly become popular, with over 1 billion USD raised in 2017 alone through ICOs. This has also led many scammers to try their luck at deceiving people into investing in fake ICOs that never materialize later on.

In the past few months, we have seen a massive surge in the popularity of cryptocurrencies. Almost every day, new cryptocurrencies are being introduced into the marketplace. Some of them turn out to be nothing more than a scam while others manage to gain acceptance. For those who are new to the world of cryptocurrencies and are still learning how it works, there is an increased chance of falling victim to these scams. There are several ways in which people can lose their hard-earned money with cryptocurrencies, so it pays to be aware of some of the common scams.

The following five strategies will help you avoid cryptocurrency scams:

1) Don’t believe everything you hear or read about any new cryptocurrency; do your own due diligence.

2) Before buying a new coin, research its developers to see if they have a good reputation in the community.

3) Be wary of buying coins that don’t have a working product yet.

4) Do not buy coins based on hype.

5) Do not send money to strangers or reveal sensitive personal information such as social security numbers or bank account information to them.

Regardless of the industry, scams are always present. Cryptocurrency is no exception. In fact, it’s quite the opposite. Because of the unregulated nature of cryptocurrency and the lack of recourse for victims, scammers are able to get away with more than they would in other industries. This leads to a much higher number of scams in the crypto space than in other areas.

As investors continue to flock to cryptocurrency investment opportunities, a greater number of scammers are getting involved in the market, too. Here is a look at some of the most common cryptocurrency scams out there and how you can avoid them.

The cryptocurrency space is a breeding ground for scammers. It’s unfortunate, but true. There are many ways to lose money in this world but here’s one I hadn’t encountered before:

cryptocurrency market cap

Now that we have your attention, the subject of this post is actually the biggest scammers of them all: the government and central banks.

But first, let us begin with a countdown of the most common scams in crypto and how to avoid them.

1. Fake Wallets

In 2017, fake wallets generated more than $225,000 in profit for their creators. In other words, people are still downloading malware disguised as popular wallet apps on their phones.

How to Avoid: Always check to make sure you’re downloading from an official source and double-check if the app requires access to features that don’t make sense for a wallet (like camera or microphone). To be extra cautious, use a non-custodial wallet like MetaMask where your keys are stored on your machine rather than someone else’s server.

2. Ponzi Schemes

In 2018 alone, over $1 billion was lost to Ponzi schemes in cryptocurrencies. The most popular seems to be BitConnect which collected $2 billion from investors

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