Crypto Newcomers Beware: Scammers Ahead | Forexlive
The cryptocurrency universe may seem too complicated for beginners but given that information regarding blockchain is available to everyone the learning curve doesn’t have to be steep and it certainly doesn’t have to involve falling into the pitfalls of popular scams.
To guide you through, here are the most common examples of the way newcomers are getting tricked and how to avoid them.
Asking for Your Private Key
Private means private.
When you set up a crypto wallet, you are given two sets of keys: a public one, which works much like a bank account number or email address, and a private one.
Scammers prey on the innocence and lack of knowledge of newcomers.
Sometimes they will try to trick naïve people into believing that they won crypto and take advantage of them by getting them to tell them their seed phase, which in turn grants them full access to their crypto funds.
Another method which they seem to use is to simply claim that they will be wiring some money into their wallets and ask for your keys.
It cannot be stressed enough: do not share your private key.
This one is self-explanatory.
Phishing is still a thing and there are many fake websites out there which look almost exactly like the coins’ original projects websites so if you are browsing, remember to check the domain’s name and the actual website’s url (sometimes scammers will swap a letter or make one noun plural) and you should be in the clear.
Or better yet, find the original one, bookmark it, and move on.
Deflationary does not mean you will eventually get rich
Ah the age-old promise of getting rich quick.
This came involves convincing people to buy a token which has a burn feature, meaning that every time said tokens get traded, part of them get burned forever.
The implication is that eventually scarcity will turn the tokens which you bought at a fraction of a dollar into a solid amount of money.
The fact, however, is that anyone can pretty much create a token with this type of feature and without having a project, established dev team, and so forth, there will hardly be any interest in it.
As such, the truth is that you will only be buying a scam token and nothing more.
The Good Samaritan
This one is actually quite ingenious.
The standard MO is that someone will contact you, claiming to be living in China. They will go on about how since crypto is being made illegal they might as well donate their crypto or give the money to someone.
Because there’s such a thing as free money.
So, what will happen is that they will send you an 100% real seed phrase with actual money in there.
But in order to get it, since you will need to cover gas fees, you will need to make a small deposit.
The trick is here is that as soon as you make that deposit, your money will be long gone as it will be instantly transferred to a different wallet, meaning that you can try and try but you will never have access to whatever crypto was in the wallet which you were given access to.
An ICO (Initial Coin Offering), to put things simple, is a way to fund the project with investors money, much like a crowdfunding project of sorts.
Sometimes, you will come across the “next big thing”, a “revolutionary project” which is a “once in a lifetime opportunity”.
Inexperienced investors are lured in thinking they will be backing the next