Bitcoin Fraud

Detecting Bitcoin Fraud

Whenever a commodity becomes a hot piece of cake, it is likely to be chased by a swarm of flies, those frauds, and scammers trying to relieve you of it. And the more portable, the more targeted the commodity will be. Bitcoin doesn’t only come with a hot price on its head and portability on its side, it also comes with the added advantage of being highly encrypted and almost impossible to retrieve once stolen. This makes it one of the most sought-after targets for fraud, theft, and scam, which leaves us with the question of what are the various kinds of bitcoin frauds, how to detect and stay safe from them.


Types of Bitcoin Frauds

  1. Fake Exchanges: Whenever you see an advertisement on one of your social media platforms of a Bitcoin exchange offering it for 10% less than the market price, just remember that if it sounds too good to be true, it probably is! A lot of fake exchanges pop up one day and then disappear the next, stealing unsuspecting buyers’ PayPal login details, as well as accepting payment for a Bitcoin that never arrives. Others offer you a Bitcoin wallet to send your cryptocurrency to but never receive any money in return.
  2. Theft Wallets: Another popular Bitcoin theft means is through fraudulent wallets infected with malicious software. Wallets are more challenging to spot and you are safer sticking to the most widely known and reputable ones everyone uses.
  3. Bitcoin Ponzi Scams: Bitcoin is an extremely valuable commodity, so whenever someone appears to offer you to double your bitcoin holdings overnight or similar too good to be true offers, just take a step back and walk away. Once you send these sites your precious Bitcoin you can sure you will never lay eyes on them again.
  4. Cloud Mining Scams: This is one of the most difficult Bitcoin frauds to detect. There are a lot of cloud mining operations that indeed genuine. These are cloud-based mining operations in which people pool together their resources to hire Bitcoin mining rigs. But Bitcoin theft is also rising on this end with many fake cloud mining sites coming online giving subscribers extremely low or non-existent returns on investment.


Detecting Scams and Staying Safe

From fake exchanges to mining scams, staying safe and effectively detecting Bitcoin fraud services can be a challenging task. The key here is vigilance on your part before initiating any kind of transaction. There isn’t universal solution to Bitcoin theft due to the varying nature of the services through which the scams happen, but the following can be used as a general guideline in order to detect frauds and staying safe from falling into their traps

  • Never fall for inordinately high promises of returns on investment especially with cloud mining.
  • Never fall for those who “guarantee” you will never lose money using them.
  • Always check the URLs of the service site, to make sure they have secured HTTPS and not clone HTTP sites.
  • Never be hurried with an imaginary “emergency” to invest.
  • Never sign up on cloud mining sites with little or no proof they actually own mining equipment or a verifiable address.
  • Only use reputable and well-known wallets.
  • Always run a background check on a service before signing up, look for reviews on reputable international online publications on them.
  • Always keep your main Bitcoin storage vault offline at all times.