We can fix it
Cryptocurrencies such as Bitcoin or Ethereum have gained a lot of attention these days. As the time goes by, the world of cryptocurrencies is rapidly growing and today we have thousands of crypto coins worldwide.
People spend a lot of money for buying cryptocurrencies because there is a lot of potential for some cryptocurrency to grow and to reward its participants. Sadly, because of the large amount of money present in the cryptocurrency world, many scammers have entered that world in order to steal money and information from people.
Cryptocurrencies have revolutionized the world we live in — but they have also attracted a lot of scammers in that world. That’s why it is important for us to know what is the most cryptocurrency scam and how to avoid it.
Phishing is one of the biggest and most common cryptocurrency scams worldwide. It is an attempt to obtain sensitive information from a user such as usernames, passwords, card details, etc. In the cryptocurrency world, phishing scams attack cryptocurrency exchange passwords, digital wallets, private keys, etc.
Phishing scams are usually done through emails.
Have you received those emails which inform you that unusual activity is happening on your account? It is usually a phishing scam.
This happens in the cryptocurrency world as well. You receive an email which looks as some Cryptocurrency support, and you click it. It says that something is happening on your account or wallet. To verify that it is you, the email guides you to follow the link and to enter your personal information.
Many people want to secure their personal data and they click this link. The website thanks you for verifying and the process ends. But, if you check your cryptocurrency wallet later, you will see that your funds have disappeared.
This is done by the scammers through phishing. Similar as the advertisements, the scammers set fake emails through which they steal your data and your funds. The website is also a scam that appears to be a proper and legitimate site because it is similar as the original one.
Pyramid and Ponzi Schemes
In the spring of 2017, a Mumbai-based company called OneCoin was delivering a sales pitch to a room of investors. Indian financial enforcement officers raided the meeting, ultimately jailing 18 OneCoin representatives for operating a cryptocurrency Ponzi scheme. At the time of their arrest, OneCoin had already moved over $350 million through a payment processor.
Investors had been duped through a combination of enthusiastic upselling, lack of knowledge of the technology in front of them, and a lot of positive media coverage (of both the project and booming cryptocurrency prices).
A lot of people lost a lot of money. And we like to think we’re clever enough to spot a scam when it is front of us. But cryptocurrency is creating new scams, using jargon and technology most people have never heard of, let alone truly understand. Even grasping the basics of blockchain technology and smart contracts is difficult for the layman.
Pump and Dump
Many prominent financial experts have also dismissed cryptocurrency as a scam. While some compare Bitcoin to other safe haven investments, such as gold, others believe it is merely a speculator’s heaven, ripe for pumping and dumping.
Bitcoin has a market capitalization of over $70 billion at the time of writing. It would be very difficult to directly manipulate the price. But smaller altcoins are extremely vulnerable to a standard pump and dump.
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