When you’re online hours a day, especially when you’re dealing with financial trades every day, it’s super important to stay vigilant about scams. A key part of being vigilant is staying up-to-date on the latest cons. Right now, a lot of those new cons have developed around the cryptocurrency market.
In a previous article, we discussed how to guard against fake exchanges, wallets, and Initial Coin Offerings (ICOs). In this article, we dive deeper into other techniques of cryptocurrency scammers.
When you’re trading in bitcoin or cryptocurrencies, sooner or later you’re going to come across phishing scams. In most cases, you’ll receive an email that will look like it is from your cryptocurrency exchange or wallet provider.
The phishing email will ask for information to verify your identity. After you supply your account information, the scammers have what they need to go into your actual exchange or wallet to steal funds.
- Never click on links from senders you are not sure about. Be especially suspicious if words are misspelled or grammar is a little wonky. Check the URL to see if looks appropriate.
- Even if the email seems valid, don’t use links in the email to get to your account’s login page. Instead, find the exchange or wallet provider’s web address from an online search engine (if you don’t already have it bookmarked).
Malware is an application that tries to damage or gain unauthorized access to your trading computer. It’s a great weapon for scammers to secretly steal your valuable trading information.
Malware can infect your computer in different ways. Your trading computer or laptop can download malware when you click the link of a phishing email. Non-reputable cryptocurrency sites are also responsible for the spread of malware.
Cryptocurrency malware can be quite complex. It might orchestrate a man-in-the-middle attack, where every time you make a crypto-trading transaction, it can replace addresses to drain your account.
- Modern operating systems ask your permission to install applications. Make sure you always say no to applications you aren’t sure about.
- Any email coming to your trading computer with attachments should be treated with scrutiny. Don’t open the attachment if you think something doesn’t feel right.
- Use reliable anti-virus and anti-malware programs (such as Malwarebytes).
The cryptocurrency market is speculative. So scammers have a lot of opportunities to run pyramid schemes, also known as Ponzi schemes.
Even veteran traders can fall prey to this scam. You get paid large amounts for your initial investments which make it seem like the crypto investment is valid.
The scammers basically take money from recent investors and funnel it to earlier investors. The purpose is to create enough buzz around the cryptocurrency project that early people invest more and encourage their acquaintances to invest.
At a certain level, the payouts become unsustainable. Then the scammers take the money and run.
- Any cryptocurrency project or ICO that promises you big discounts for spreading the word to investors should be treated with suspicion.
- Avoid any scheme that sounds too good to be true.
- Old-fashioned research into the fundamentals of a venture can often help you detect early signs of wrongdoing.
You can use your own dedicated hardware to mine bitcoins and other cryptocurrencies. But you need the technical know-how to set up and maintain the hardware.
Cloud mining allows you to rent the necessary hardware on the cloud. They invest in infrastructure setup and maintenance.
You pay for the right to use their hardware to earn cryptocurrencies. The problem is you’re dealing with people in a virtually unregulated industry.
So scammers can easily set up fake cloud mining companies, and you might end up renting hardware that doesn’t exist.
- Look into the reputation of the cloud mining company before signing up.
- Avoid companies that promise astronomical profits.
- Avoid companies that have anonymous domain registrations.
If you’re a bitcoin trader, the security of your trading computer is crucial. Continue to stay safe by staying educated about your enemies’ tactics and by staying vigilant.
We hope today’s Quick Tip helped you. If you found this helpful, you’ll want to check out the other computer How-To’s I’ve created on this page. You can always call us if you have questions: 800-387-5250.
Photo by Kevin Horvat on Unsplash.