Bitcoin existence has gone up, but then it has met downturn. Over the years, it has clearly taken investors, and each person involved in the cryptocurrency. Only time will answer whether Bitcoin, which has been controversial since its introduction in 2009, will continue booming or just diminish and arouse more people to short-sell Bitcoin. Furhermore, anyone looking for that fortune can also just as easily fall victim to Bitcoin frauds.
One thing is for sure though: Bitcoin’s meteoric rise has attracted a lot of attention. People may not understand the technology or philosophy behind Bitcoin, but they do see some investors succeed in making a few thousand bucks into millions when Bitcoin’s value increased as it did in 2017.
One of the advantages of cryptocurrency is that it’s unregulated by the government and very private. However, it is also easily become a scam. If you’re interested in Bitcoin, be wary of these potential frauds.
Bitcoin Fraud 1: Fake Bitcoin Exchanges
In 2017, there was one of the most dangerous Bitcoin fraud in South Korean; a fake exchange called BitKRX. It presented itself as part of the largest trading platform in the country and took people’s money.
To avoid this type of Bitcoin fraud, stick with popular, prominent Bitcoin exchanges and forums so you get news of fakes quickly.
Bitcoin Fraud 2: Ponzi Schemes
One of the most notorious Ponzi schemers is Bernie Madoff. He did it with common investments. But the principle of a pyramid scheme, in which you take money from new investors to pay previous investors, can be applied to Bitcoin scams. In 2019, three men were arrested in a $722 million cryptocurrency fraud scheme. The men operated BitClub Network for years. The scheme solicited money from investors in exchange for shares of cryptocurrency mining pools. It also supposedly rewarded investors for recruiting new investors. As you know, the investors never got any returns on their investments in the end.
Bitcoin Fraud 3: Malware
Malware has been an old way for hackers to get passwords in order to access computer networks or steal credit card and bank account numbers. Now they are using it to conduct another one of the most common Bitcoin scams. If your Bitcoin wallet connects to the internet, they can easily use malware to get access and drain your fund. Thus, you need to protect yourself from malware.