This year brought considerable growth to the crypto community. In particular, Bitcoin regained much of its lost value and is on its way to fresh new all-time highs. Along with this added value comes a host of Bitcoin scams. Unfortunately, the unregulated and private nature of the market makes it ideal for scammers seeking to prey on new investors.
Bitcoin has a tendency to attract a lot of attention when it enters a bull market. This attention helps to drive new users into the market. Problems arise when new investors lack the experience to identify common Bitcoin scams, including fake ICOs, shady trade groups, and fraudulent exchanges. Analysts agree that only an education can prevent users from falling victim to these ever-changing schemes.
Bitcoin is Forever
The immutable and unalterable nature of Bitcoin means that once you send your cryptocurrency to another person, there are no refunds or chargebacks. Bitcoin’s peer-to-peer nature makes it ideal for these types of transactions. However, new users are more likely to be unaware of this fact and treat their crypto as if they were spending
fiat currency on a credit card, or another financial instrument that permits refunds.
2020 – A Mix of Old and New Bitcoin Scams
This year saw a combination of schemes play out so far. These scams range from old school classic frauds, all the way to new industries plagued with fake firms. Here are some of the most prevalent Bitcoin scams to avoid for 2020.
Chain letters are one of the oldest scams around. In this scenario, someone will send you a random letter claiming that you will receive a large reward if you forward the message to others. Of course, you do need to put up a little money to be “eligible” for these mystical profits. Recently, chain letters have transformed from western union and money gram based schemes, over to crypto-based alternatives.
Chain letters primarily prey on elders. They will often promise some form of religious endowment or other spiritual blessings to motivate elderly people to participate in the scam. Sadly, these scams may be one of the first ways an elderly individual encounters Bitcoin. To avoid losses, never send funding to people you don’t know or companies that strike you as suspicious.
Social Media Hacks
This year saw hackers pull off a brazen social media hack. In the incident, the hackers took control of Twitter’s back end to gain access to multiple high-value accounts. Once they had access to these accounts, they began posting that they would match all donations made via Bitcoin.
It was later revealed that Twitter employees had been hacked. This gave the hackers access to what developers called “God Mode.” Insanely, the hackers even gained access to former President Obama’s account and other government officials. In total, $121,000 worth of Bitcoin was stolen.
Exchange Scams – Bitcoin Scams
Exchange scams are another…
Read more:Big Bitcoin Scams to Avoid for 2021