Cryptocurrency, on the whole, receives a lot of bad press. And to a certain extent, rightly so. It is a fascinating space to be amongst, but it is rife with scams, which tarnishes the majority of the hard work and innovation in the industry. Here’s what to look out for so you don’t become a victim of a crypto scam.
Firstly, it is important to distinguish the difference between a sh*coin and a scam. A shi*coin is a term used in the crypto community to describe any other cryptocurrency besides Bitcoin. As a neat rhyme conjured up by Bitcoiners, the term grew in tandem with the number of cryptocurrencies entering the space. Therefore, it is considered an easy way to label cryptos that don’t offer the same sound money principles that Bitcoin excels at. But does that make all sh*tcoins a scam?
By definition, a scam is considered a ”dishonest scheme; a fraud”, which would imply that all other cryptocurrencies are taking part in nefarious activities. Now, people may go as far as saying Bitcoin is solving a huge financial problem. However, that does not make all other cryptos a scam. There are a number of cryptos that do provide a use case, albeit somewhat debated. Having said that, it’s fair to suggest most other cryptocurrencies are incredibly speculative and warrant skepticism over their legibility. After all, the very fabric of cryptocurrency has made it unregulated for a large part, which enables scams to easily occur.
Crypto scammers are incredibly effective as imposters to influencers in the industry. This is especially prevalent on social media platforms whereby they can create an almost identical profile with thousands of fake followers and, even sometimes, a fake Twitter verification. As a result, it is extremely important to not take things at face value. Additionally, be thorough and diligent where you find your information and trust no one. Whilst it sounds dramatic, it is the easiest way to fall into the trap of a scammer that directly messages you offering “crypto investment and trading opportunities”.
Scams can also occur if your privacy is compromised in some way. Whether it is because you left your seed phrase on your phone, or the exchange you hold crypto on gets hacked, you are running the risk of getting scammed. It’s unfortunate but also avoidable. The best way to manage this is by keeping all your information private. For instance, keep your seed phrase stored away offline in a private place and allow two-factor authentication so that you have an extra layer of protection against hackers.
While some scams are unique to crypto, there are other scams that follow the same tried and tested methods on all kinds of people. A big scam to look out for is someone offering a large amount for a small fee upfront. Needless to say, no one will ever give you money after asking for a small amount first. Additionally, there are lots of giveaway scams, whereby scammers create fake events online. Further, they edit celebrity interviews and use it as a way of luring people into the fallacy of thinking it is legitimate when it really isn’t. Similarly, phishing scams are clever at disguising themselves are “support scams”. Above all, they claim they are protecting you against the very people that are in fact doing the scamming. As always, be vigilant and protect yourself.
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