Spotting and avoiding scams to protect your Bitcoin in 2022

The global adoption for Bitcoin is slow but the progress is undeniable. As more people learn the value of this digital asset, it also attracts the eyes of thieves who aim to steal your investment through scams. You need to know how they’re done and how to deal with them to protect your Bitcoin. 

There are so many scammers online and they can be summarised into short descriptions like the following. Just know that these are real activities that any Bitcoin holder may face in the future. They can’t see what you do with your assets or where you send and receive them, making non crypto holders also liable to meeting them. Just be careful with who you interact with and know how to avoid them.

Here are common crypto scams and how to avoid them

Addressing reasons why Bitcoin is prone to scams

To be more prepared with how to deal with Bitcoin scams, you must fully understand why it is coveted. It’s the most valuable digital asset in the world in terms of both its market value as well as uses. Any crypto-friendly business and country can accept Bitcoin while other assets have yet to follow. 

The reason why Bitcoin thieves resort to scamming rather than burglary

Why are thieves reliant on scams rather than burglary? The answer is the security of the blockchain where Bitcoin circulates. It’s the main advantage crypto has over fiat and physical properties that can be stolen from homes or snatched from your pocket. Even if your wallet is taken, you can recover your account using your seed phrase. 

Most wallets also protect your assets in a way that anyone who hacked your account can’t use your Bitcoin without the proper private keys. Thieves have no choice but to force you to make a mistake in sending your BTC to steal them. A simple awareness over common Bitcoin scams is enough to ward thieves away so know what you need to be prepared against them.

How to spot Bitcoin scams 

How to spot Bitcoin scams is only difficult if you let your guard down. Always stay vigilant when sending transactions even on platforms that you are used to using. Popular exchanges are more prone to getting a copy built to phish your personal information while obscure ads can lead to scam websites. Here are some factors to know that can help you stay vigilant:

Knowing what makes a good exchange

Exchanges can come in different forms as they are all built to serve their own vision of what they know investors need. Thus, a veteran trader knows what to expect from a good exchange before they send money anywhere. Good exchanges support many crypto but scam websites can overshoot it by adding crypto that you have never heard of before. Only trust sites owned, managed, or built by other notable figures in the Bitcoin industry. Wait until the exchange gets endorsers that you trust like sports teams or wallets that you are using. 

Understanding how crypto wallet security works

Wallets are designed to be used only by the owner and nobody else should get your private keys and seed phrase. If the technical support you are talking to asked for it, then it’s a scam. Take your business elsewhere, whether it’s for help with a mistaken transaction like a missent Bitcoin or help with exploring your wallet’s other functions. Likewise, Bitcoin ATMs are also possible targets of scammers. 

All it takes for  successful Bitcoin ATM scams is for the user to be oblivious of the basics. Scammers can give you the wrong barcode or QR code to scan that will cause you to send your Bitcoin to someone else’s wallet rather than withdraw them as cash. Just read the manual and don’t trust strangers with how to use your wallet or ATM. 

Identifying limitations of centralised and decentralised services

Other than your wallets, you can also have your Bitcoin stored in various platforms like an exchange or a gambling site. The best platforms create a new wallet for you to use while using its services. Centralised services should have customer support that can help you with deposits and withdrawals or issues with the service itself. 

Decentralised platforms should have a community of experts that can help you with your specific needs. However, neither of them should ask you to click on a link or re-enter your account details on another prompt on another site. If your browser tells you that you’re leaving the website or if the URL given to you has a misspelling, then it’s a scam. 

Here are helpful crypto investment strategies

How to avoid Bitcoin scams

There are many ways on how to avoid Bitcoin scams but there are a few that can cover all possible worse case scenarios. The following three ways can help you avoid Bitcoin scams even if you aren’t completely guarded. Turn these into habits to be extra protected:

Stick with people you trust in joining a mining pool

Mining pools are regarded as the only way to earn Bitcoin passively without having to invest on expensive rigs and running electricity. Pools charge 1% to 3% fees because they will be sharing their Bitcoin profit with a newcomer. Just be sure that you trust its members, especially its biggest contributors because scammers use this as a front. Bitcoin mining scams charge you for the fee but it turns out that either there is no pool or they gladly take your rig’s hashrate to mine crypto but never share it. 

Don’t trust cheap or unknown brokers

Brokerages are often expensive because of the difficulty of trading. Cheaper services are always sketchy, especially if it’s being offered by an institution you have never heard of before. Only trust big brokerages like eToro and Binance to avoid Bitcoin broker scams online. 

Don’t jump at investment opportunities until after you study it

Exploring new opportunities is what makes being an investor fun as well as profitable. Unfortunately, many Bitcoin investment scams are waiting for you to make a mistake. Many of them are great at establishing a vision that many people can believe in while others are just counting on investors to not look too deep into the concept. Bitcoin trading scams, for example, are set up to offer you new assets as the next volatile miracle. 

Never log in your wallets when using public wifi

The biggest example of Bitcoin wallet scams is phishing where an online wallet, like MetaMask, is replicated to look convincing and logging in is giving your login information to the scammer. You have to look closely into logos and the URL to avoid such cases or just use the app to prevent having to sign in through a web page. 

Take away about Bitcoin scams

Bitcoin scams to avoid are limited thanks to blockchain technology’s secure autonomous network. This at least minimises points of errors for bad actors to exploit. The only way to stay safe is if you are educated on the matters yourself. Always stay vigilant whether you are using wallets, exchanges, brokers, and ATMs. 

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Words: Clarence Clarke