Identifying Bitcoin scams, Luno

Werner van Rooyen

27 Sep 2016 &bull, Trio minute read

Bitcoin is attractive to scammers for the same reason it’s attractive to you: it’s rapid, it’s international, and it’s irreversible. So spil Bitcoin usage has grown, wij have seen more and more Bitcoin scammers vanish with user funds.

The following are some of the most persistent Bitcoin scams.

Bitcoin Ponzi, HYIP or MLM schemes

Thesis schemes attract people with low or no subscription fees and promises of sky-high comes back on their deposits. They often rely on existing investors signing up fresh ones, which is the only source of revenue or growth. Spil with all Ponzi schemes , early investors get paid with the money from zometeen investors.

Inevitably when fresh investors zekering signing up and depositing, the scheme collapses, since no more funds can be paid out.

What to look out for

Thesis are some of the warning signs that you might be dealing with an illegal scheme:

  • Promises of very high comes back/rente
  • Ensures that you “can’t lose money”
  • Little verifiable information on company and owners
  • Difficulties te withdrawing your funds
  • Social signup linksom with high bonuses
  • Sense of urgency to “invest now”

Bitcoin phishing scams

Phishing scams are common ter the online world. This is when a scammer creates emails, messages, login pages and/or websites that resemble a legitimate company. Once users inject their information (like login username and password) on the fake webstek, the scammers have access to the users’ accounts. If it is an account where Bitcoin is stored, the scammers can lightly make off with the money.

Where users have the same password used on numerous sites, the scammers can often build up access to other sites with more sensitive information.

How to prevent phishing scams

  • Don’t click on suspicious emails
  • Ensure the onberispelijk spelling of the webstek address
  • Use a unique, strong password for every webstek account
  • Use a reputable password management instrument
  • Enable two-factor authentication on sites that support it
  • Report suspicious emails to your email provider (spil phishing)
  • Report suspicious websites to the respective web hosting company

Bitcoin mining scams

Bitcoin is generated through the process of mining, which confirms Bitcoin transactions on the Blockchain. Mining requires fine amounts of energy, expensive equipment and upfront capital. Bitcoin mining investments emerged out of this need, whereby many users can invest te a mining scheme and get a percentage of future mining proceeds.

There are some legitimate Bitcoin mining schemes, but there are far more mining scams than legitimate garments. Since it is difficult for most investors to confirm if a mining scheme actually possesses mining gear (or does any mining at all), there are many websites that voorwaarde to mine but simply take investor funds, pay high comes back for a while to build trust and then simply vanish.

Avoiding mining scams

Thesis are some of the things to be on the lookout for:

  • Inability to see or verify the proof of ownership of any mining equipment
  • Inability to see or verify their public mining address and ownership
  • Fresh webstek (look it up with )
  • High referral commissions
  • Assured profits

Bitcoin wallet and exchange scams

There are some websites claiming to be wallets meant to store Bitcoin. Others voorkeur to be exchanges, where one can trade Bitcoin. Others yet rechtsvordering to do both, but many of thesis are ter fact scam sites.

They simply get users to sign up and deposit Bitcoin or local currency for a while to build trust and then after a while make off with the money.

Things to be on the lookout for

  • Only overeenkomst with reputable, registered companies
  • Make sure you can verify the identity of the employees/owners
  • See if they are mentioned te reputable local or international news publications
  • Treat anonymous and fresh exchanges, apps and browser extensions with caution

List of known Bitcoin scams

Since it is very effortless to set up a scam webstek, it is unlikely to always have an up to date list of scams. You should do your own research and learn to look for suspicious schemes.

However, here are some sites that research/comment on scams:

If you are putting your money anywhere , it’s up to you to do your own research and investigation (Google and Reddit can take you far). And reminisce: if something sounds too good to be true, it very likely is.

Werner van Rooyen

Werner goes up Marketing and Communications at Luno. His passions include payments, e-commerce, technology, marketing and vormgeving: something that he has bot fortunate enough to do on three different continents. Werner has lived and worked te South Africa, the United States, Indonesia, Taiwan and China.

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