How do you define cryptocurrency?
Cryptocurrencies are digital currencies that exist only electronically. It is not possible to purchase physical bills or coins unless you use a service that lets you trade cryptocurrency for physical tokens. Cryptocurrency is usually exchanged online, using your phone or computer, without the involvement of an intermediary like a bank. Bitcoin and Ether are well-known cryptocurrencies, but there are many others, and more are created constantly.
What are your storage methods for cryptocurrency?
A digital Bitcoin wallet stores cryptocurrency, which can either be found on the Internet, on a computer, or on an external hard drive. In the event of an unexpected incident – your exchange platform goes out of business, you send cryptocurrency to the wrong recipient, you lose your digital wallet password, or your digital wallet is stolen or compromised – you are unlikely to be helped to get your funds back. Due to the fact that cryptocurrency is typically transferred directly without an intermediary such as a bank, there is no one to turn to in case of problems.
The Best Way To Avoid Cryptocurrency Scams
Using cryptocurrency, scammers are always coming up with new ways to steal your money. Anyone who insists you pay in cryptocurrency is likely a scammer. Anyone who asks you to send money via wire transfer, gift card, or cryptocurrency is a scammer. Obviously, if you pay, there is almost no way for you to get that money back. It is these scammers who profit from your payment. Take care to avoid these cryptocurrency scams.
Investing and business opportunity scams
- There are companies that claim you can earn lots of money and achieve financial freedom in a short period of time.
- There are some scammers who ask you to pay in cryptocurrency in order to recruit others. They say if you do, you’ll get paid with cryptocurrency for recruitment. If you pay more cryptocurrency, you can expect to make more money. This is a false statement and promises can’t be trusted.
- Likewise, scammers may contact you with unsolicited offers from supposed “investment managers,” who claim they can help you grow your money if you provide them with your cryptocurrency. However, if you log into the “investment account” they opened, you’ll discover that you can’t withdraw your money without paying fees.
- Scammers sometimes offer unsolicited jobs to assist in recruiting cryptocurrency investors, selling cryptocurrency, mining cryptocurrency, or converting cash to bitcoin.
- There are scam job websites that are posted by scammers. The job will be offered for a fee, but they’ll end up taking your money or personal information.
Using claims such as these can assist you in spotting companies and people you should avoid:
- Scammers promise you’ll make money. That’s a scam if they promise you’ll make a profit. Even if they have celebrity endorsements or testimonials. (Those are easy to fake.)
- Scammers promise big payouts with a guarantee of returns. No one can guarantee a set return, such as doubling your money. Even less so in a short period of time.
- Scammers claim to offer free money. Money will be promised in cash or cryptocurrency, but free money promises are always false.
- A scammer makes big claims without explaining how they work. Those who invest their money in business want to understand how it works, and where their money is going. A good investment advisor will share that information with them.
Make sure it’s a good investment before you invest. Search online for the company name and cryptocurrency name, as well as words such as “review,” “scam,” “complaint.” See what others have to say. See what other common investment scams are out there.
Emails used for blackmail
A scammer will often send emails in which they claim to have personal or embarrassing information about you. Next, they threaten to make the information public unless they are paid in cryptocurrency. Do not cooperate. They are blackmailing you and extorting you. Report them immediately to the FBI.
Scams on social media
When someone tweets, texts, emails, or posts on social media that they need cryptocurrency, the message is a scam. This is true regardless of whether the message is from a friend or a celebrity you follow. Social media accounts may have been hacked. Report the scam right away.