A fundamental step to protect our virtual coins is to store them at the hardware level. We must choose a physical device, such as a USB drive, which stores encryption keys locally and is not connected to the Internet. Experts advise against saving large amounts of cryptocurrencies on digital and connected applications. The Net offers too many tricks for a hacker to steal our coins.
But there are also certain schemes that can lead us into fraud, outside the technical matters of data theft. Here are the 5 most common scams in the world of virtual coins!
The growth in popularity and earning possibilities represented by virtual currencies in recent times have attracted more and more people. With the increase in investments, hackers are also trying to exploit this trend with scams and malware created specifically for cryptocurrencies.
As with any online scam, however, there are techniques to recognize and avoid them. The fear of a hacker attack, in fact, must not limit our investments; we simply have to pay more attention during the purchase of the virtual coins and during the collection of the information necessary to complete the transition. Currently there are basically five different methods on the Net used by cyber criminals to deceive users interested in Bitcoin and other cryptocurrencies. Here's how to recognize these deceptions and how to avoid being scammed by hackers.
Cryptocurrency exchanges
The growth of Bitcoins and its siblings has led to a steady increase in online virtual coin exchanges. In this way we can buy a crypto-currency by paying it in dollars, euros or with other crypto-currencies that we own. Unfortunately many online programs and sites that offer virtual currency exchange services are actually fraudulent. To avoid losing our money, the advice is to use only highly reliable sites to buy or exchange crypto-currencies.
Pyramidal or Ponzi schemes
Pyramid or Ponzi selling systems are fraudulent schemes often used by cyber criminals to steal the money of people interested in Bitcoins or other Famous Virtual Currencies. These patterns are not born in the digital world but in the sales of non-existent products or services. Thanks to a sort of cascade system that works through the chain of Saint Anthony, anyone who brings a new customer into the system earns a percentage of the sales of that particular person. This system is also used for the sale of some cryptocurrencies. Too bad that after months of investment and work we will not receive anything because behind the company that hooked us there is no virtual currency. In India, the scam company of OneCoin has deceived several online users in early 2017 with this method and in total has earned over 350 million dollars. And only a small part of this money has been recovered.
Camouflaged prices
Some cybercriminals use a scam already present in the world of finance to deceive users with fake offers of virtual currencies. This doesn't need technologies or encryption to work. It is a simple fraudulent sale. In practice, at the time of sale, the price of a new crypto-currency is pumped to make us pay more, but once we buy it, it loses all its value. Fraudsters will tell us that unfortunately due to a market response our currency has lost value but in reality has never had the evaluation that was given to us at the beginning of the transition. Now, this scam is only possible with newly created and semi-unknown virtual coins. Bitcoin, for example, has a valuation that compares in dollars or gold and therefore it is impossible, or almost impossible, to be scammed in this way. For this reason, it is always advisable to buy reliable and already known virtual coins, even if they cost a little more.
Beware of ICO scams
An ICO is an Initial Coin Offer. Or an initial offer of a new currency. Thanks to crypto-currencies, in fact, anyone can issue their own currency. Except that in general a newly issued currency has no great value. However, if you could buy a coin when it just came out and is worth very little, if it were to increase in value you could earn a lot without doing anything. Obviously, cyber criminals on the Net have released many totally bogus and fraudulent ICO offers. For this reason it is advisable not to make any purchase if: there is no accurate or updated information of the company that generated the currency, we do not find any news on the Net about the company that issues the currency and if we notice questionable commercial practices, such as insider trading.
Be careful to invest in DAOs
Some decentralized autonomous organizations (DAOs) have successfully issued their own cryptocurrencies online. These systems can be an excellent earning system, especially if at the beginning we have little money to invest and we cannot afford a too famous virtual currency. Unfortunately, these systems are less secure. In 2016, for example, a DAO system was tampered with by a hacker who stole a third of the group's total coins on his account. Money that was then never recovered.
We hope after reading this article you can minimize your risks in investing in Bitcoin and other cryptocurrencies.
