An Example of Bitcoin Scam
BTC 148 represents a reported scam site promising a one-year lifetime supply of BTC for only $147. On Tuesday, January 9, this Bitcoin wallet revealed that the recent bounty from Google did indeed serve as a way to buy the coins. The company has since been criticized on Reddit, calling it “a worthless scam,” and one user posted: “You’re offering this for free. The fake news media are creating hysteria and false consumer outrage against the service for an opportunity to profit. Your ICO looks like a scam to me.”
BTC 148 appears to use the same formula that other scammers use. According to the company’s Twitter post, they wanted to help out and donate their bounty to a charity of your choice.
How To Identify A Bitcoin Scam
You must identify if the company you’re dealing with is actually legitimate or if it’s a cryptocurrency scam, before investing a dime in them.
Criminals like to take advantage of unsuspecting people, so if you’re curious about their motives, you can take a few simple steps to spot a scam. For example, does the website state that your personal information will be used for “security purposes” or “to keep you informed”? Does the company post news updates to try and keep their wallet users and investors up to date? Is it difficult to find out how to contact the company without putting in some effort? If a scammer is trying to gain your trust, he or she will ensure that you don’t have to do anything to get in touch with the company.
How To Invest In Bitcoin Without Being Ripped Off
Blockchain investing wasn’t a concept many were familiar with at the start of 2017. The first coin to go mainstream was Bitcoin, which rose from $1,000 to $19,000 in 2018. Other cryptos — like Ethereum and Litecoin — also gained in popularity this year. But to make the most of your investment, take a few extra precautions.
Make a way to monitor your crypto investments. I discuss four ways to do this.
Resist the temptation to buy a new high-value coin and sell it later for a profit. This is the “tulip bubble” effect, which you can see in the dot-com bubble of the late 1990s. By buying into a new coin, you may have a problem when others realize its true value. Remember, too, that there is a limited supply of bitcoins — just under 21 million.
Determining if the Company is Legitimate
A general rule of thumb is that you should never invest more than you’re willing to lose. If a cryptocurrency firm is promising you the moon, be sure that it’s worth your time and money. Any company with a history of other dubious promises, lack of background information or history of trouble with the law should be avoided.
If the Company isn’t transparent about its business model, be suspicious. There is typically no real definition of what the company does. When it comes to the legal side of cryptocurrency companies, note that if they promise you high returns or release a product that doesn’t meet expectations. If any of the above happens, they’re probably scammers.
The ICO Process
Offers like ICOs allow startup founders to raise money by selling cryptocurrency tokens directly to customers. Because the tokens (think of them as Bitcoin investors) are backed by digital currencies, these projects will then receive future payments for their services or products. The concept is a compelling one, but getting a project off the ground can be a complicated process, and many are misleading.
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Recognizing a Digital Currency Scam
The very first thing to remember about cryptocurrency is that it’s a new market, but investing in it is no different than investing in stocks or mutual funds, which have also been around for a long time. What’s different is that the regulations surrounding cryptocurrencies are still in their infancy, which means the rules for this new sector are far from certain.
Be very aware of who you’re dealing with. If you meet someone online and receive an email offering you a chance to invest in an ICO—initial coin offering, a form of crowdfunding—find out who they are and how they’re established.
“Cryptocurrency scams have a long history,” explains Zach Wilcox of Better Business Bureau of Southern California, “one of the biggest falling scams is fake ICOs.”
Avoiding a Cryptocurrency Scam
If you’re looking for guidance on how to spot the best investment opportunities, there are good resources out there to help you evaluate your options and choose the right business for you. You can also use sites like Better Business Bureau and the National Association of Securities Dealers to gauge a company’s reliability. Even if you’re just curious about investing in cryptocurrencies, it’s a smart idea to stay as close to the truth as possible to keep your investments safe.
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