The 3 Common Bitcoin Scams And How To Avoid Them

Some people still think that Bitcoin itself is a scam. The truth is that it is now, finally, a legitimate currency that is as real as the US dollar. However, that doesn’t mean that there are no scams associated with Bitcoin.

Where there is money involved, there is a scammer not far behind plotting ways to take it away from people with little effort. And, since Bitcoin is new and not many people understand how it works, it is easy to pull scams and take their coins.

In this article, we will go over several of the most common Bitcoin scams so you don’t fall for them.

Fake exchanges

One of the easiest ways for scammers to separate people from their Bitcoin is to set up a fake exchange. This is a platform where you buy your cryptocurrency from fiat money or even how to buy Tether or other cryptocurrencies with Bitcoin.

It is very important to know and trust the exchange where you decide to get your coins. Once you send your money to a wallet, then there is no way to reverse the transaction. Your money or your Bitcoin are gone for good.

Ask your friends who know about cryptocurrencies where they have bought theirs and that way you know it’s legitimate. Also, now you can buy using Paypal or ApplePay to get your cryptocurrency. This is the most likely place for people that are not used to dealing with cryptocurrency to acquire them these days.

Phishing

This scam is as old as the internet, but has made a roaring comeback recently due to people getting into Bitcoin. A phishing scam is one in which people ask you for personal and sensitive information in an email.

For instance, if you are new to Bitcoin you may not understand hope important it is to not give away your keys. These are the codes that indicate where your bitcoin or other cryptocurrency is on the blockchain. If somebody has them they can drain your wallet in seconds. And, there is no way to get them back.

Never answer an email that says that you have to provide your secret keys for any reason. It is usually a phishing email and should be reported. Many times, these may look very official and professional. And they can come soon after you’ve made your purchase so it looks like it’s part of the process.

Fake cryptocurrency

There are a lot of cryptocurrencies out there and everybody is looking for the one that is primed to blow up and make a ton of money. Unfortunately, this is a good way for scammers to operate. Just on a much bigger scale. There are some out there that will go through the process of starting a new coin complete with white papers that promise a lot.

Then, after the Initial Coin Offering, they disappear since there was no coin to begin with. Do your due diligence with any new coins to make sure they are legitimate.

*This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.