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Review 5 Crypto Scams You Need To Guide Against

Discussion in 'Crypto Learning Center (Library)' started by philipj, Mar 24, 2018.

  1. philipj

    philipj GrandMaster Crypto Guardian

    For those looking to navigate the minefields of cryptocurrency and ICO investment worlds, here's a list of things that could part an investor from his or her hard-earned money.

    1. Smaller cryptocurrencies with no clear value proposition
    Bitcoin has a value proposition, as an alternative store of value to precious metals. Ethereum, the world's second-most valuable cryptocurrency, has attracted developer and institutional support due to its ability to support smart contracts -- a way to enforce financial contracts with no intermediary -- and distributed apps. And Ripple/XRP, the world's #3 cryptocurrency, has drawn interest for its potential to drive cheap cross-border transactions.

    But there are hundreds of cryptocurrencies that do not have value. Some claim to be arround to solve some problem, but never really get off the ground. Don't be surprised if most of those 100 or so cryptos are worthless, most of which will disappear in a few years time.

    2. Public companies that are suddenly being hyped as cryptocurrency plays
    This phenomenon is starting to die down, but it is hardly finished. If, say, a medical instrument developer or an iced tea maker decides to add &Blockchain& to its name and declare it's now a cryptocurrency play, it's best to tread carefully. Likewise, when a larger, more legitimate company is suddenly being hyped as a crypto/blockchain play, you should at the very least do some research about just how much crypto exposure the company actually has, as well as what the growth prospects for that side of the company's business look like.

    3. ICO scams
    As ICOs -- sales of brand-new cryptocurrencies or tokens that are tied to services being enabled by the offering company, and which are typically purchased by investors using Bitcoin or Ethereum -- proliferate, so have reports of scam offerings . Often accompanying these scams are the following: Promises of massive returns and/or guaranteed profits, claims about using the cryptocurrency/token being offered to transform how a major industry functions, a white paper filled with dubious or poorly-researched arguments, a lack of a clear roadmap and a flurry of promotion from a previously-unknown company on social media and cryptocurrency forums. You have to be careful

    4. Phishing attacks
    Cryptocurrencies are hardly the only assets to be subject to phishing attacks -- scams in which someone tries to spoof the identity of a reputable organization (often with the help of a phony website) that a victim has an account with, in order to steal his or her credentials. But cryptos have become an especially popular target lately. In January, Ernst & Young estimated that nearly $400 million of the $3.7 billion that had been raised to date via ICOs had been lost or stolen, with phishing attacks responsible for much of the damage.

    5. Pump-and-dump schemes
    There have also been reports of pump-and-dump schemes in which one previously-obscure crypto or another spikes higher with the help of aggressive newsletter, social media and/or messaging-app promotion, only to tumble soon afterwards as its promoters use the opportunity to unload their holdings. Please, verify such news so you do not become a victim
     
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  3. sajin

    sajin Rookie!!!

    Since popularity and exchange of cryptocurrencies are increasing now, scammers are using this opportunity to steal the money from the people involved in this business. Their main intention is to take away money from people by giving them false promises and deals. Many types of scams are reported in the crypto market.
    Bitcoin scams have been famously criminal and public in nature. With no bank as a middleman in exchange, things become more complicated.
    Know more about 7 common bitcoin scams and how can you avoid it by reading.
    7 Common Bitcoin scams - and how to avoid them