Is Bitcoin a scam? – Cryptocurrencies are NOT a scam. Learn how to avoid these types of frauds.
Bitcoin a scam?
Unfortunately, it is very common to hear
news about cryptocurrencies being apart of scam schemes.
Since there is a great lack of knowledge
about this market, a number of criminals take advantage of ingenuity and
misinformation to steal people’s money.
The scam scheme is almost always the same:
a person hears about the possibility of making great profits in a very short
period of time. Therefore, he decides to take the risk and invest all his
savings in a crypto brokerage company.
Sadly, at the time of withdrawing the money
from the brokerage company… problems! It is impossible to recover the funds.
Then, the investor realizes that he has fallen into a scam.
In addition, there are other types of
crypto scams: fake coins, viruses that steal your money, fake exchanges…
The issue is that this type of news ends up
polluting the entire cryptocurrency market. In traditional media, it is not
uncommon to read stories treating Bitcoin as a sort of crime or fraud.
In order to clear up this confusion, Cripto
InterCambio blog has decided to address this question: Is Bitcoin a scam? And
explain the most common types of scams in the crypto world.
Is Bitcoin a scam? Types of
1. Financial Pyramids (or Ponzi schemes)
This is certainly the most common type of
scam with Bitcoin and other cryptocurrencies.
A “cryptocurrency agent” promises
a great opportunity for profit within a short period of time. Usually, they
claim there will be fixed rates.
Regrettably, countless people invest their
money in these schemes, expecting quick profits.
For a pyramid to work, the first people who
put their money in it can withdraw it easily. In this way, the brokerage
company gains confidence and manages to attract more clients.
The problem is that the broker just took the money from new clients to reimburse the old
ones. In reality, no real value was generated.
However, when more people try to withdraw
their funds, there simply won’t be enough money. Therefore, this type of scheme
Why Bitcoin is not a financial
Bitcoin never promised high returns to anyone who invested in its project, nor did it try to attract customers to invest. Strictly speaking, Bitcoin is a cryptographic digital currency, which is generated independently of financial institutions, or any type of company.
The significant appreciation of Bitcoin in
recent years reflects the adoption of and interest in this asset. In this sense,
Bitcoin is no different from an expanding company whose shares gain greater
value in the financial market.
How to avoid financial cryptocurrency
Be wary of performance rates well above the market;
Be careful with companies that offer fixed returns on your crypto investments. The price of Bitcoin varies widely, and it is unlikely that any broker can maintain fixed interest rates;
Keep your cryptocurrencies in your own virtual wallet. This way, nobody will run away with your money. Learn more about virtual wallets in our article: Virtual wallet: what is it?
2. Fake Exchanges
Another common type of scam in the
cryptocurrency market is fake exchanges.
Basically, they are fraudulent custodial
exchange houses (this means they store client’s money).
There have been cases of companies that,
after declaring bankruptcy, just disappear with all their clients’ funds.
Always keep your cryptocurrencies in your own virtual wallet!;
Give preference to non-custody exchanges. Since they don’t store your money, they certainly won’t lose it. Cripto InterCambio works this way!
3. Viruses and Scams
The growth of the cryptocurrency market has
led thieves to use viruses and scams as tools to steal cryptocurrencies.
A virus is nothing more than software
installed on the user’s computer or cell phone to steal data. Generally, people
end up with a virus without realizing it. They can get it by clicking on emails
with questionable files, or even installing infected software.
There are even scams sent via email or
WhatsApp. Usually, they request personal data or money with an unlawful
How to avoid viruses and scams
Have a good antivirus installed on your computer and on your cell
Select hardware wallets that are not connected to the Internet;
Never send your data by email, SMS or WhatsApp;
Be careful with any type of data or money request online.
4. Fake cryptocurrencies
Cryptocurrency scams are very specific.
Many cryptocurrencies have had fruitful growth in recent years. With that in
mind, some scammers have created fake cryptocurrencies just to steal funds.
Usually, they are cryptocurrencies that
claim to be in their early stages of development and promise high yields in a
short period of time. Spoiler alert: it is a scam!
How to avoid fake
Get to know the cryptocurrency’s whitepaper, developers and its user
community: transparency is essential when choosing
a new cryptocurrency to invest in.
Be wary of cryptocurrencies that promise high returns: cryptocurrencies were not created as a simple mode of speculation,
but as substitutes for fiat money. The ups and downs of the market are a
consequence of its adoption.
Give preference to already consolidated cryptocurrencies. Also, if you’re going to take a risk with a new project, don’t
invest all your money on it!
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