Online Scams 101
The market for virtual currency has been riddled with shady entrepreneurs. While each year brings new versions of digital wallets and new virtual coins to buy, the value of your Bitcoins and other digital currencies is volatile and the marketplace is rife with scams. Be skeptical of anything you hear about these new online currencies.
If you want to invest in Bitcoin and other digital currencies, you should do it with caution and some skepticism, just like with any other investment. Here are a few precautions to take with the following scams that are circulating online.
Fake Bitcoin Companies
Fake Bitcoin companies—often called crypto-phishers—offer to purchase Bitcoin from you for a fee.
That’s not to say there are no viable blockchain-powered cryptocurrencies out there. A good way to look for genuine and trustworthy blockchain companies is to search using terms like “disruptive” and “self-evolving.” The latter phrases are frequently used in blockchain-related terminology, and each has positive connotations. For instance, you may hear someone explain that blockchain technology is like the internet, because it’s able to “self-evolve” to better suit consumers’ needs.
Blockchain scams will appear on many different online forums and posts from scam artists. They use names like crypto cold wallets, crypto coins, and the phrase blockchain, crypto coins, and crypto wallets to make them seem legitimate.
What to Look for in a Startup
It’s difficult to categorize a Bitcoin scam, or an ICO. Often, they’re well-funded and well-monied, but their operations are a mystery to consumers and employees. In the cryptocurrency space, it’s hard to avoid scammers. According to Ben Johnson, a spokesperson at bitcoin site itBit, “There are too many ways to get investment money.”
If the Bitcoin company in question uses traditional finance channels, it’s likely a scam. ICOs have to raise money by offering cryptocurrency tokens in exchange for fiat currencies. These tokens offer a private and secure method of payment through the blockchain, and are often worth a great deal of money. However, their value has an enormous up-front price tag.
There are many potential benefits that digital currency has on the world of commerce, and it’s not hard to see why it continues to gain momentum. Though fraud and scams will likely persist, if you’re savvy about digital currencies, you can make the most of the innovations and opportunities they offer.