Cryptocurrency has become famous throughout the world because of its high value. However, it also poses a significant risk because you can easily suffer from Bitcoin Scams. As per the FTC, 7,000 people have lost about $80 million in the US because of scams.
If you also have Bitcoin and want to avoid being scammed, you’re in the right place. Here is everything you need to know about Bitcoin scams and how to avoid them.
The Common Bitcoin Scams
Here are the top types of Bitcoin scams you may encounter:
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Pyramid Schemes
This is one of the top Bitcoin scams you will have to keep yourself safe from. Online individuals may appear friendly and share some tips with you. However, remember that the advice is most likely to make you take part in their scheme.
Many schemes are based on the pyramid or referral chain format. A scammer may tell you to send them some Bitcoins if you want to recruit people for a Bitcoin rewards program. Simply put, you will be promised that your investment will bring you a greater profit.
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Fake Websites
Multiple Bitcoin scams are present on the market, but this is the most prevalent type. Many websites post stuff about helping you mine cryptocurrency or invest in Bitcoin. The worst part is that many of them look and function legitimately. This is why it will be tough for you to distinguish between authentic and fake websites that perform Bitcoin scams.
Typically, the site may send you a message about investment and getting high profits. So you may decide to invest in the project because it sounds and seems authentic. However, your money will be lost as soon as you transfer it.
If you try to pull your investment, you will be asked to send some more coins for withdrawal. The worst part is that you will not get anything back after this step.
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Giveaway Scams
You may not trust online individuals because of Bitcoin scams, but that can be tough if you encounter a celebrity. Many people use famous personalities to post fake giveaways on Instagram, Twitter, and other social sites. You may also encounter thought leaders participating in Bitcoin scams.
The scammers will tell you that they can multiply the currency immediately. However, most of the cases are Bitcoin scams, so you lose your money. In this type, you directly send money to the scammer’s wallet.
This is why getting back the amount is next to impossible. The Elon Musk impersonator cases are the most prevalent incidents of Bitcoin scams.
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Online Dating
Dating is relatively complex in the physical world but easy on online channels. Many Bitcoin scams happen because of digital dating. A scammer may approach you to gain your trust. Gradually, you will find yourself in a long-distance relationship.
Once the individual establishes adequate trust, they will message you to send them some Bitcoins. The scammer may also present you with a multiplication scheme and tempt you by promising high profits. However, you will be ghosted as soon as you send the money.
The FTC reports that many investors over the years have suffered highly because of online dating. This is why you should always watch out for such Bitcoin scams.
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Fake Bitcoin Mixer Websites
A Bitcoin mixer is a service that allows you to remove the traceable connection between a sender and receiver. This means that you can send and get money anonymously by using a Bitcoin mixer. No one will be able to track the currency transport because of mixing.
However, finding a Bitcoin mixer is a hassle for many people. This is why many users seek help from Google. That is where you need to be alert because you will see many fake Bitcoin mixer website results. Of course, not all services are scams, but you should still be aware.
Helix by Grams and Bitcoin Blender are the top two fake Bitcoin mixer websites. You will come across these sites frequently on Darknet search results. However, remember that clicking only the top results does not mean that they are credible.
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Impersonators
Finally, impersonators are behind multiple Bitcoin scams on standard and dark websites. The individuals mainly pose as a government officer or business to extort money from you. You will encounter many FTC reports about people suffering from Bitcoin scams due to Social Security Administration.
Of course, you must note that scammers impersonated members of the administration. You may be asked to send a specific amount of money through Bitcoin ATMs. Besides that, many scammers also pose as Coinbase to fool you.
You may also encounter hackers on the internet fooling you to share your Bitcoin. This may happen directly when the scammer contacts you. However, it can also occur indirectly if the hacker attacks the cryptocurrency wallet you use. Many people get information through such hacks and target vulnerable people.
How to Avoid Bitcoin Scams?
Here are the top precautions you can take to avoid Bitcoin scams:
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Do Your Research
Many Bitcoin scams will involve you receiving messages from a company that seems legitimate. This is what happens in most scamming cases of Bitcoin mixers. Such scams come under the phishing category and may be difficult to identify.
This is why doing thorough research will help you avoid the Bitcoin scam and keep yourself safe. A primary thing you can do is search the name of the company on Google. You should also add a specific keyword after the name, such as complaint, illegal, funding, and much more.
Typically, you may encounter different results when you use specific keywords after the company name. This is one of the top ways to learn whether the site is a scam or not.
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Keep Your Keys Safe
A primary thing to note is that Bitcoin exchange and transactions don’t work like a bank. This means you will not have access to customer support if things go wrong. There is also no way to block suspicious transactions automatically. So you will have to protect yourself using traditional methods and your wits.
The top thing you must do is protect your Bitcoin keys from scammers. Be sure not to share your data with other people. This is because it will put you at a greater risk of being scammed. You should also understand which key you must keep safe.
A wallet will provide you with one public and one private key. The former is the one you can share with others to receive Bitcoins. However, the latter should not be shared with anyone. This is because it is the key that will allow you to access your wallet.
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Do Not Share Your Seed Phrase
Another key thing that a wallet generates for you is a seed phrase. This is a backup term that will help you recover your account in different cases. Once you receive the phrase, the wallet will tell you to write it down and keep the paper safe.
The primary reason to encourage writing on physical paper is so that the phrase does not remain on your computer. No matter how safe an online device may be, it is still prone to suffering from hacks. This is why you should not store sensitive information on your computer to stay safe from Bitcoin scams.
You must also avoid sharing the seed phrase with other people, including family members. If a scammer gets this phrase or your private key, they can empty your Bitcoin wallet without contacting you.
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Check Links
This top tip will help you avoid Bitcoin mixer scams and keep yourself safe from phishing scams. Many times, you will receive emails from sites that look legitimate and ask for reasonable data. However, remember this is just a way to gain your trust.
Once you click on Bitcoin mixer scam links and invest money, you should not expect to see your currency again. The good news is that you can identify such scams by paying attention to detail. Most scammers posing as a company or personality make some intentional mistakes in the address.
For instance, you must look out for spelling mistakes to identify Bitcoin mixer scams. In the Ledger Bitcoin scam, the scammer used the phrase legder.com. Many people failed to notice this minor spelling mistake and suffered losses.
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All Free Bitcoin Posts Are Scams
You may also come across free Bitcoin giveaway posts on Twitter by fake celebrity pages. The key thing to remember is that this currency is highly valuable. This is why no one gives free Bitcoin to anyone. So you must consider all giveaway posts to be fake.
As a first-timer, you may be tempted to try your luck. However, you will end up losing more money than you gain. This is why refrain from participating in Bitcoin giveaways.
Conclusion
This is everything you need to know about Bitcoin scams. Once you remember these precautions, you can keep yourself safe. These steps will also allow you to use safe Bitcoin mixer websites instead of fake ones. So be sure to remember the identification steps for phishing scams.